Digesting the “crap sandwich”
It's been called a crap sandwich and an outrage, but what else can we expect from a financial collapse-and-bail scenario that involves players with names like Fanny and Boehner?
CNN's split screen showed politicians wandering around as the vote see-sawed while Wall St dealers effected a similar rollercoaster ride on the tickertape. You couldn't help but savour it all for the joke it so clearly is.
Some of the more intelligent comments of the evening's proceedings came from Barney. Although neither purple nor a dinosaur, Barney Frank is definitely a larger-than-life character and his appeal to all Congressmen to join in a collective rendition of "I love you, you love me" in the interest of applying the defibrilator to the American economy was admirable. Ironically, given the age and propensity to apoplexia of their presidential candidate, the Republicans were having none of it.
The initial requests from the battered financial sector in America that the government simply hand over the readies and trust them to do the right thing with it would have been tantamount to handing a kleptomaniac your life savings to take to the bank. If only the bank wasn't packed to the rafters with similarly afflicted creatures.
The concept of shorting has always put me in mind of those movies where a couple of buffoons charged with looking after some mafia boss' money hit on the idea of betting it all on a “sure thing” and pocketing the difference. We all know what happens. Sitting in the cinema, we laugh at these poor fools and marvel that anyone would trust them with so much as a box of matches. Why is it, then, that when a similar scheme is hatched by well-groomed men in expensive suits, we swallow it?
The sooner we abandon the notion that markets are sentient, self-righting beings, the better. Those who have made billions based on this concept are no doubt adverse to the suggestion that the market maybe is now righting itself - nature abhors a vacuum and anything that is wildly out of balance, like the system we've lived with for the past 50-odd years. Running into a brick wall is okay once; it's when you keep doing it that people start to question your intelligence. Rather than constantly malign governments for attempting to regulate it, it's time the business community showed an understanding of the concept of symbiosis. Governments create and support the legal and social frameworks, the infrastructures and the education of people that allow business to do its thing. What's more, as the current situation shows, governments are also the real bankers of the planet; without their guarantee, no one's going anywhere for a buck.
It's worth remembering that one of the main reasons that South Africa has, so far, been able to weather the storm is because our banks haven't been particularly heavily exposed to America - thanks to the oft-bemoaned exchange controls enforced here.
The suggestion that it's somehow different when the private sector demands state support while harping on about the relentless demands of the undeserving poor is nauseating. Persistent suggestions that “big government” holds back free enterprise falls flat in the face of the evidence of what some businesses really do get up to if they're not closely monitored.
Unhealthy appetite for risk
Only governments can solve these problems through reform, clear penalties and an insistence on accountability. We need to take the box of matches back off the buffoons with the cans of petrol.Pamela Weaver, senior writer, ITWeb Informatica
The truly galling thing about the situation in Congress the other evening was that many of the Republican no-voters rejected the plan not because it would scandalise their constituents but because they were concerned about its impact on the wallets of the people they really believe are responsible for their political elevation: the bag men who pour money into their campaigns.
We are increasingly being left with a hollowed-out shell where society used to be. Maybe a bit of goodwill could be restored with the restoration to taxpayers of a “defined outcomes” pension system for all. Maybe those with an unhealthy appetite for risk would show a little more care with other people's money if they knew they'd be making up the balance for any losses. If America allows these people to walk off with their wallets and bonuses intact, along with the assurance that - heaven forbid - their taxes won't be increased, the only certainty is that we will be right back here again in about five minutes. The simple reality is that only governments can solve these problems through reform, clear penalties and an insistence on accountability. We need to take the box of matches back off the buffoons with the cans of petrol.
For years, ordinary people have had to listen to billionaires lecturing them on the evils of “big government” and how we'd all be filthy rich too if only we'd get off our lazy arses and work as hard as they do. Margaret Thatcher's government famously suggested that the disaffected unemployed of England “get on your bike” and come to London where, it seemed, the streets were paved with bottles of Bollinger and red braces. In a matter of a few short years, she was out of a job and forced to make a living sniping at her successor and defending the honour of despots. Her mission to sell off virtually every state asset of value to the private sector for a quick buck offers an interesting slant to our situation today, with governments the world over forced to buy a pup so that the profligate can keep buying Hugo Boss.
Whatever happens, John Boehner was right about one thing: this bail-out is a crap sandwich - the more bread you've got, the better it tastes.
* Pamela Weaver is ITWeb's contributor.