Saving Capitalism from the Capitalists

John McCain (right) with his former financial guru Phil Gramm,
who is credited with masterminding our present financial mess

Today's water cooler conversation, "My bank was taken-over, was yours?"

We are in the largest bank failure in US history.

My bank, Washington Mutual, the nations largest savings and loan, was seized by the federal government last night! I couldn't have said it better than Bill Moyers:

The big, bad government so despised in Wall Street boardrooms and Beltway think tanks has stepped in hoping to save Capitalism from the Capitalists.

I'm reading some hilarious emails from my right wing relatives trying to blame this on our 2 year old Democratically lead congress. I would give them more of my ear if they blamed Bigfoot and the Loch Ness Monster. Grabbing at straws. Funny they never mention John McCain's former financial guru Phil Gramm who is credited as the main player in this mess, by people who know more about our economy than the garbage coming from Fox News.

from the New York Times:

Thursday, in the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know."

Professor of economics and international affairs at Princeton University and columnist for the New York Times Paul Krugman had this to say:

The general co-chairman of John McCain’s presidential campaign, former Sen. Phil Gramm (R-Texas), led the charge in 1999 to repeal a Depression-era banking regulation law that Democrat Barack Obama claimed on Thursday contributed significantly to today’s economic turmoil.

….

According to federal lobbying disclosure records, Gramm lobbied Congress, the Federal Reserve and Treasury Department about banking and mortgage issues in 2005 and 2006.

During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages

Floyd Norris, the chief financial correspondent of The New York Times and The International Herald Tribune, said this on Bill Moyers Journal on September 19th (you can video pod cast this by the way on iTunes):

I can only envision what the right wing would be saying if a Liberal Democrat had decided to nationalize the biggest insurance company in America. I don't think you would be hearing a lot of praise for it.

He went on to say:

It was only a few months ago that I had Wall Street CEOs complaining to me that their stock prices were so low because the press was mean to them, we didn't appreciate what wonderful business strategies they had...

Assistant business and financial editor and a columnist at the New York Times Gretchen Morgenson of the New York Times said on Bill Moyers Journal:

The Ugly thing about this is, this is privatizing gains and socializing loses. So when things are going well, the managements make out, the share holders make out, the counter parties are fine, all the "private sector people" do well. But when something goes wrong, when decisions are made that turn out to be bad decisions, the US tax payer has to take on the problem. And there is something very wrong about that. Because all of those people that made all of that money are running off here into the distance, with the money, carrying it in their bags, and the United States tax payer is on the hook.

She went on to say:

I think that the free market idea, the free market constant mantra, that it would bail everybody out, or that it would operate in such a smooth fashion that you don't need the government, was absolutely behind, you know, the last ten to fifteen years of what we've seen. And I think now we very seriously need to question that.

I'm not partisan about this. I know Bill Clinton had his hand in the deregulation of our financial systems during his presidency. And I don't fully trust Obama can straighten this out (though I trust him and the team he will put together a whole lot more than I trust McCain/Palin. Kucinich, where are you?)

If you have trusted your home or retirement to our Republican lead government and our 'free market,' my prayers are with you.