The economy is like a heart. Blood has to pump through it, in this case, money and assets. Sometimes capital loses its value and gets stuck in the system. These “toxic assets” are like cholesterol. They stick to the wall and prevent other things from getting through, causing a “blockage.” Sadly, the economy isn’t some truck you can dump things on, it’s a series of tubes.
So right now, there’s a ton of cholesterol in the system and it’s causing problems. A lot of Republicans want to wait it out and let the cholesterol later leave the walls. A lot of Democrats want to rip the heart open and take the cholesterol out with their finger. Henry Paulson wants to do an open heart surgery that’s only been done twice before.
So naturally, it’s a tough sell to either side since they are obsessed with our eventual economic destruction, but after many days people seem to have finally decided on the expensive operation. While it can’t solve the problem, I was feeling kinda good about it. Hell, for some reason I felt like we could trust the people that got us into this mess. I felt safe and secure. Then I came out of class and saw this.
And worse, a stock market drop the likes of which that hadn’t been seen in 11 years.
So what broke their agreement? This.
Republicans bailed because Pelosi gave a last minute partisan harangue. 40% of Democrats bailed so they could blame the bill’s failure on Republicans. Others bailed because they want to get reelected, not do the right thing. You know, fixing the crisis they created.
Nice to see Washington hasn’t changed.
Addendum: At least we know the Treasury Department is efficient, competent, and surgical, right? Right?
In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
I suppose someone managed to talk Paulson down from a bazillion. I feel so much safer now knowing how on top of things the Treasury Department is.