Counterpunch, October 6, 2008
Still on the Edge of the Abyss
By MIKE WHITNEY
French Premier François Fillon: "We're on the edge of the abyss”
Years from today, when the current financial crisis is over, historians
are likely to agree that it would have been far better if the Bush
administration had declared a state of emergency earlier in the process
so that the necessary steps could have taken to avoid a complete
financial meltdown. The media could have been used to bring the American
people up to date on market-related developments and educated in the
bizarre language of structured finance. Knowledge is power; and power
can prevent panic.
Now we're in a terrible fix. People are scared and removing their money
from the banks and money markets. This is intensifying the freeze in
the credit markets and driving stocks into the ground like a tent stake.
Meanwhile, our leaders are caught in the headlights, still believing
they can finesse their way through the biggest economic cataclysm since
the Great Depression.
f something is not done to increase the flow of credit immediately,
the stock market will tumble, unemployment will spike, and many
businesses will grind to a standstill. We could be just days away from a
severe shock to the system. Secretary of the Treasury Henry Paulson's
$700 billion bailout does not focus on the fundamental problems and is
likely to fail. At best, it puts off the day of reckoning for a few
weeks or months. Contingency plans should be put in place so the country
does not have to undergo post-Katrina bedlam.
Does Congress have any idea of the mess they've made by passing the
Bailout bill? Did any Senator or congressperson voting Yes even notice,
that while they were busy mortgaging off America's future, the stock
market was plummeting to new lows? Between the time the ballots were
cast on Paulson's bailout, and the announcement of the final tally
(which was approved by a generous margin) the market went from a 310
point gain to a 157 point loss; a 467 point plunge in less than two hours.
Thus spake the Market: "Paulson's bill is a fraud!"
full: http://www.counterpunch.org/whitney10062008.html
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