The political, policy, and governance implications of the brewing banking disaster south of the border are troubling. Occuring during the presidential campaign as it does, you’d think, you’d hope that it would be fodder for some real policy discussion, but you’d be mistaken. You’d be disheartened. Since the causes of the problem are well enough known and accepted by both presidential candidates – wreckless deregulation of the financial industry in the late nineties, you’d think that they’d be pressuring for more regulation as part of the “rescue plan”, but no, they are not. Not in any meaningful way, at any rate. Instead, it is viewed by the media and politicos as a sort of litmus test for McCain and Obama on their “ability to lead” or some other throwaway attribute that fundamentally comes down to “not doing anything just now”. That this was a hypothetical mind game and not a reality.
One would hope, and hope is all we have some days, is it not, that someone would raise their eyes and suggest that maybe, just maybe, buying out all of the “bad debt” with taxpayer money is really in fact just rewarding the behaviour that created the problem in the first place. Particularly if no real restrictions were to be put in place to prevent a recurrence of the same crisis later on.
(A hypothetical – If the US government was a parent, how would it respond if their teenage kid come running to it with a maxed-out credit card? Why, it would say “oh, bad, bad boy”, pay off the debt, taking a second mortgage if required, and then hand the card right back to him.)
Of course, there is an alternative, one which I thought nobody at all was talking about, and it turns out that some were, but they just weren’t getting real media time. That is, until I heard Dennis Kucinich interviewed by Rachel Maddow (broadcast last night, but online this morning). Kucinich calls for “New Deal” economics, help out the home owners so they don’t default on their over-priced mortgages, saving them and the banks in the process.
Unfortunately, in modern US doublespeak, helping out banks is “capitalism” and helping out real people is “socialism” and we all know what socialism is, right? Bad.
That McCain won’t suggest something as outrageous as helping people stay in their one home doesn’t surprise me at all, he’s backed by big monied interests and speaks only for them. That Obama has not is more troubling, because we hope (there’s that word, again!) that he has the best interests of everyman at heart.
I live in hope that he’s following the now-infamous Kim Campbell line “an election is no time to talk about policy”, but that might be just me being pollyanna. It’s entirely possible that a deal will be signed before the election and the next president will either be completely handcuffed by it or will roll over and pretend to be so as to not open up what could be an unruly can of worms.
Either way, without a real third alternative (and this is from an Obama supporter), the American taxpayer loses.