I know we keep channeling Arthur Silber here, but he has been all over the deeper implications of "Bailoutgate" than anyone else. His latest piece rightly skewers the emerging "compromise" between Bush and the Congressional Democrats on "oversight" of the government gift program for the Gordon Gekko gang. As any sentient being might have suspeted, the "tough oversight" being offered by such champions of the common folk as Chris Dodd and Barney Frank is -- wait for it -- a weak and watery sham.
Silber quotes the Wall Street Journal (his italics):
One broad area of agreement involves congressional oversight. Rep. Frank said the Treasury agreed to an independent board to monitor the bailout and report on its progress to Congress and the public. The board wouldn't have authority to veto Treasury investment decisions, and the bailout's launch wouldn't be delayed while a board was being put in place.
Then goes on:
Dodd's plan is no better with regard to "oversight"; see Section 4 (among other provisions: "The Emergency Oversight Board shall meet 2 weeks after the first exercise of the purchase authority of the Secretary under this Act and monthly thereafter." Yeah, that should do it.). In addition to the fact that the centerpiece of Dodd's proposal is the one action that should not be taken and that will do nothing to "solve" an insoluble problem, is its gross immorality: presenting the bill to American taxpayers who had nothing to do with creating this crisis. And yet, even Paul Krugman claims that Dodd's proposal is "a big improvement over Paulson's plan."
As he has done for days, Silber keeps hammering away at the salient point in this carnival of greed and power-grabbing: no bailout "plan" of any kind can fix this problem:
The consequences we are now seeing are irrevocable and unavoidable. The bad debts must be accounted for and written off. A problem of massive bad debts and insolvency is not a problem of liquidity. This truth means one thing in terms of the "solutions" proposed: a massive bailout of insolvent financial institutions which includes keeping the bad debts in the system still longer is precisely the wrong action to take. It will not solve the problem, for this problem cannot be solved. But it will accomplish one goal: it will postpone the problem to another day, and it will make the problem worse, and it will cause still greater damage.
...In other words, Krugman insists that we solve a problem that cannot be solved -- but that we do it more "efficiently" and "competently." This is precisely the argument that Democrats, liberals and progressives always make -- even with regard to momentous war crimes like the invasion and occupation of Iraq. In still other words: they concede the basic terms of the argument, and argue only over the specific implementation. And then they pretend to wonder why they keep losing the argument. Here's a clue: they keep losing the argument because they never engage it. If Krugman and the many others like him have their way, the immorality and the futility will continue, in economic policy, in foreign policy and in every other area -- but the immorality and futility will be carried out more "efficiently."
In this essay, Silber also addresses one of the underlying elements driving us into so many disasters:
[M]ost Americans will not accept that actions have consequences, and that those consequences are sometimes irrevocable. Your prayers will not restore over a million slaughtered Iraqis to life. Your wishes will not instantaneously erase the horrifying memories that make an American soldier unable to sleep, incapable of holding a job, and that make him a stranger to his own family. There are times when our actions lead to results that cannot be undone.
These are not difficult concepts to grasp, Silber says....and yet:
Yet most Americans -- and our entire governing class and almost all commentators and bloggers -- refuse to grasp them. It is as if these ideas are written in a dead language. Certainly, the language is dead to them, for they have made themselves incapable of understanding it. To recognize a truth of this kind threatens the mechanism of denial that lies at the very center of their sense of themselves, at the very center of their identity. So the truth cannot be acknowledged.
And so the bailout, in one egregious, unjust, destructive form or another, will go through, and the Democrats will vote for it, and Barack Obama will say - as he said in the FISA law debacle, when he stood with Bush and Cheney for tyranny -- that it's "not perfect" but it's a "good compromise" and he will work to make sure the bailout is -- wait for it -- carried out "efficiently". (By his many economic advisers who had instrumental roles in creating the crisis in the first place, no doubt.)