Thursday Night at the Blanding's

This Week:  A Special Humor Event

This week we'll be temporarily meeting as an unofficial, non-sanctioned Laughing Liberally chapter to watch the Vice Presidential Candidate debate!  Again, Karen and Spencer have been kind enough to volunteer their TV room for the event (address below).  The debate starts at 7pm.  If you come a little early, you can help us decide on a new location for our meetings (which discussion I missed last week, being late and all).  However, it looks like our plan to move permanently to the Blandings is working out nicely!

Everyone's pointed out what a disaster it would have been if the McCain/Bush SS privatization plan had been put in place back in 2005.  Near-term retirees who never saw this market meltdown coming would have been devistated.  Of course, not everyone was taken by surprise:

"Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials.  He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough."

So.  The Bush Administration has had this plan in the works for months.  They've known about the crisis, but didn't want us to know – most likely hoping that the markets wouldn't crash until after the election.  But that's the way they've always operated.  Remember how, for years, Bush told us we were winning in Iraq – right up until he unvailed a new plan for victory?  SOP.

But that's a subject for another time.  I wonder about something else.  Put on your conspiratorial tin-foil hats.

Wall Street is not stupid.  Those firms have departments that analyze, study, forecast, and audit.  They understand their portfolios better than anybody.  And they've known for years that they were pushing an unsustainable business model.  Several years ago it became obvious to all of them – the investment houses, the financial insurers, the integrated banks – that their growth and profits couldn't be sustained on the housing bubble and the associated derivative products ("credit default swaps").  They realized that those bundled subprime loans were over-valued and over-rated (since they had done the ratings themselves).  They also knew that the credit default swaps were trading way higher than anyone could justify, in a completely unregulated market (thanks, in part, to Clinton).  They also knew that there were no reserves to cover losses – also thanks to changes made in the late 90s.

In short, they knew that the true value of those assets and derivatives were more like Dutch tulips than sound investments.  They all knew that it was just a matter of time until a slight housing downturn would uncover the incredible weaknesses in the house of cards that they had built.  So what could they do?  They looked around and saw a huge pile of money, untouched by their hands:  Social Security.  A brand new source of income that could sustain their growth, increase their profit margins, float their golden parachutes, and hide their exposure to the overvalued housing bubble.

Lo and behold, following the 2004 election, George Bush announced that the "Social Security Crisis" was the number one domestic threat to America's future.  A problem that had to be solved immediately, if not sooner, because it was that important.  Bush was going to use the strength of his "mandate" to solve the SS problem forcefully.  Remember how all his arguments were shot down as totally baseless?  (And remember how every time Bush went on prime time to push the idea, it's popularity dropped?)  Nobody fell for it, because it wasn't really a problem.

So just why was Bush saying the problems was so dire?  Why did he fabricate an emergency where none existed?  Did the GOP's wealthy backers push the Bush Administration to put this minor issue on the front burner as some sort of major personal threat to the American public?  Was Bush shilling for Wall Street in 2005?  Would that be criminal behavior, if true?

Cheers,
Dan

Statistics

Action for the Week

Quotation of the Week

"Senator Obama and his allies in Congress infused unnecessary partisanship into the process.  Now is not the time to fix the blame.  It's time to fix the problem."
John McCain (at 2:25)

Translated Quotation of the Week

"It's Obama's fault. But I'm above blaming people."

Bonus Quotation of the Week

"With due respect and sympathy for the man, that was the picture of a beaten dog.  That was the picture of presidential impotence right there.  He looked terrible like his bell had been rung.  He looked drawn to me."
John Heilemann on Bush's press conference

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