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« Of Beauty Queens and Debates | Main | CRA and the Current Credit Crisis »


Will We Take Our Economy Back?

By P.J. Pohly
October 3, 2008

The roller coaster this week has left some ordinary citizens outraged. Many are confused. Some are frightened. Most are disillusioned that their government officials allowed the financial industry to reel this far out of control. Quite a few are infuriated that middle income taxpayers are being tapped to prop up the Wall Street gamblers.

Surely in the coming months, our writers here at EverydayCitizen.com will help to examine how we can dig ourselves out of this unbelievable mess. We'll need an adequate understanding of how we got here in the first place. We also need to realistically assess the damages.

Who's getting the short end of the stick?

Some of the writers here have already begun scrutinizing our economy. Many of their blog posts offer launching pads for that analysis. Here's just a sampling of hundreds of archived essays that might be even more relevant this week than when they were first posted.

We not only need to examine and understand the past. We will need to protect and strengthen ourselves for the future. We will also need the will to demand the right actions from our government. The current political campaigns seem to all be saying that they "see us" - but do they really? What do they see? Do they see what we need them to see?

Didn't we see this coming? Did they?

There's no money - and never was any real money - sitting behind most of that exotic paper being passed back and forth on Wall Street.

Imagine that you (the Wall Street big shot) are able to bring your own (worthless) poker chips into the casino (Wall Street securities and swaps trading meeting) with you. You swap and gamble that supply all away. Then, you just go back to your office and manufacture some more poker chips out of thin air. Afterward, you saunter over to the (Wall Street) casino and gamble even more of the fakery. At some point, you get caught manufacturing your own chips (making fake, unsecured, unregulated trades) and people don't want you to do that anymore. So, you call up Ben Bernanke at the Fed and say, "Hey, Ben, give me some real money so I can buy some real chips to replace all those fake chips I've pawned off." Good 'ole Ben says, "I can give you some extra chips and maybe even some protection by loosening even more rules for you, but if you want a whole lot more poker chips to play with, call Henry Paulson over at Treasury." You call Henry. Henry calls George Bush and George threatens Americans a few days later and demands that Americans fork over their real money to Bush's shady pals on Wall Street. In his primetime speech, Bush bullies us with, "Americans, I have bad news. Either give me your money or I'll shoot you." And we do.

Who's to blame for that? We are. Why? We've let the government loosen the rules more and more for the last 25 years. Once upon a time, the only poker chips you could play with on Wall Street were the ones that you had reserves as back up for. In other words, the regulations required you to have some cash and to buy your chips with real cash. That hasn't been the rule in many years. And - that's the root of this problem. The Wall Street gamblers have been faking each other and us out.

Our tendency will be to sit back and allow our government to sort this out. Or to let Wall Street figure it out. Or maybe we'll be hoping just time itself somehow will make things right.

After billions of our future earnings are given freely in coming months to the wealthiest Wall Street gamblers that had speculated away their own savings and enormous monetary fakery, don't we have every right to hold our leaders to task?

This is our wake-up call. We'd be foolish to allow ourselves to be passive and blindly trusting anymore. Thirty, almost forty, years of passivity is too much. People in our own neighborhoods, towns and cities are suffering like they've never suffered in our lifetime. Things have certainly changed. There's so much damage. There's much to be done.

We cannot trust that the powers-that-be will come even close to making the changes we need, can we? It seems necessary for the people (that's us) to demand it. More than demanding it, we need to steer it. We may even need to define it. All of us are needed for this one. Aren't we?

What now? How do we hold the wrongdoers accountable? How do we protect ourselves? Where do we start?

Before we can authoritatively demand that our "leaders" make the sweeping and substantial changes that we require for our future, we may need to first take ourselves by the scruff of our own collars and make sure that we are snapping out of our denials, doldrums and dream states. We need to make it clear to ourselves and each other that we are, indeed, first, facing some hard facts.

For starters, can we finally say out loud that we no longer believe in trickle down economics? Didn't we get here in the first place because our leaders wrongly believed (and led us to believe) that just whatever was best for Wall Street would be best for you and me?

How many of us are aware that much of the real money in New York is coming from Asia and Europe and the Middle East? How many of the companies we are bailing out are really held by investors overseas?

Haven't we even begun to comprehend that when Wall Street is happiest that the real "trickle down" actually trickles down overseas and not here? Are we going to finally accept that our poverty has no effect whatsoever on Wall Street, except when our purchases at Wal-Mart start to decline?

How many of us have taken notice that Wall Street never missed a beat when our neighbors lost their jobs or when so many in our communities have seen declines in their wages? Isn't it obvious to us that Wall Street never cared if our incomes plummeted, just as long as we didn't stop shopping?

The so-called economy that previous generations talked about was one where all Americans had a stake. This new economy of globalization is not constructed that same way. It's jarring to accept the truth that Wall Street firms are really mostly concerned with creating jobs in China, India, Thailand or Indonesia - and not so much in Alabama, Kentucky or Oregon.

The Wall Street of today is not the same Wall Street of the 1940s to the 1970s? Aren't we also willing to accept that deregulation has caused the disappearance all the old reliable methods of investing and loaning money?

Will enough of us come to believe that all those new phantom products and deregulated slippery paper trades, consisting of unsecured counter party risk, default swaps, fleeting derivatives, and odd securities - are just unseemly wispy unregulated stuff that is not what Wall Street was once made up of?

Now that Congress has forked over another 700 billion dollars of our hard earned taxpayer money to the Bush Administration, we deserve an explanation, don't we? Will we call for it? Can we forthrightly insist that our leaders unglue themselves from their dysfunctional obsession with unregulated markets and their Wall Street centricity?

Can we claim our protections? Will we take our economy back?

Will we really?

Or, as I fear, are too many of us feeling too beaten and scared to even speak up anymore?


Comments (5)

Angelo Lopez Author Profile Page:

Thanks Pam for referring us to past everydaycitizen entries that are so relevant to this week's financial problems. I've learned alot from reading the writers of Everydaycitizen.

You're asking the right questions. Will we get the answers that are best for our country?

P.J. Pohly Author Profile Page:

I learn a lot from Everyday Citizen writers, too, including from you!

Jerry Jacobs Author Profile Page:

Whoah. Pam. I've made a note to myself on a post-it. I will insist that I read and re-read your post here every morning with my first cup of coffee. No kidding. I need you as a wakeup call, lest I devolve into a stepford citizen.

Your questions awake the part of me that I try to subdue for fear I may fail at the revolution that's called for. Yet I know we all, ordinary citizens, are needed for this one.

Nora Thomason Author Profile Page:

Powerful post. Thanks too for the reminders of all the phenomenal writers and archives right here at this site. Powerful post!

NoraT.

Peter Tramel Author Profile Page:

Thank you! Having heard more about the deal that finally passed, I am terribly disappointed. As I understand it, it is both another trickle down plan and an unsustainable kind of fix -- like taking out a third mortgage to make payments on the second one for a while, while taking no real steps to get your finances in order.

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