Political Cortex: Brain Food for the Body Politic

To display the spectacular miscalculations of Washington Mutual's crash-guaranteed mismanagement by its CEO Kerry Killinger, the role he played in the fall of the bank could be compared to a gambling addict.  Even when it was clear that a housing bubble was emerging, the high risk loan policy continued.

Instead of Washington Mutual making prudent loans with minimal risk factor, loan officers had become a production line, feeding Wall Street's insatiable appetite for short term profits.

U.S. citizens can be thankful that George Bush's trips to 50 states to sell the idea of transferring some of Social Security to private accounts or to Wall Street failed.

With the Wall Street meltdown some senior citizens who had transferred their Social Security life savings to private bank accounts or the Wall Street stock market could conceivably be homeless and living on the streets.

Tragically any people who have lost their jobs and are too young to collect Social Security are homeless in Chicago, Cleveland, Seattle, Los Angeles and other U.S. cities, thanks to the world trade agreement signed by Bill Clinton.  

With no provisions to stop manufacturers from transporting their entire business operations out of the U.S. to obtain cheap labor and no union restrictions much of U.S. manufacturing disappeared, leaving many U.S. citizens hunting for work.

In Jon Talton's September 14 article on the collapse of Washington Mutual he explained:

"The boom was simply a federal reserve driven, once-in-a-lifetime phenomenon:  a bubble created as the value of assets grew faster than the cost of borrowing.

"In essence, then fed chairman Alan Greenspan had built the world's largest Ponzi scheme.  And like all such enterprises, it came to grief.

"Given its size, it is not surprising that some measures of damage are the worst since the Great Depression.

"Washington Mutual's board 's ultimate sin was not to remove Killinger far earlier.

"Shareholders now get to pay his successor a $7.5 signing bonus (as he takes over) while their Washington Mutual Bank stock hit a 17 year low."

It was about time the feds took over, unfortunately at the point they took over the stock was worthless.  

In Time Magazine's October 6 issue Joe Klein wrote:

"Bush's presidency began with the destruction of the Twin Towers by al-Qaeda terrorists.  

"It is ending with the devastation of twin trillions, the money spent on a foolish war in Iraq ($653 billion and counting) and on the bail out of a financial industry gone hog-wild, during the Reagan initiated era of deregulation."

The national debt is now nearing $10 trillion, greater than all previous U.S. debts combined since the U.S. was founded.

The national debt is also the equivalent to one-half of the national debs of all the nations in the world.

It was Richard Nixon who took the U.S. off the Bretton Woods gold standard, and floated the U.S. dollar against all other currencies.

In Peter Hartcher's book "Bubble Man:  Alan Greenspan and the Missing $7 Trillion Dollars", he reveals that "7 out of 10 U.S. dollars are now in foreign lands."

The U.S. now owes Japan $592 billion, China $502 billion, Great Britain $250 along with other billions to Arab countries.

As such a subsidized nation, such as the U.S. is today, does is therefore make any sense to be spending $10 billion a month in Iraq, rebuilding Iraq's infrastructure that we demolished and funding U.S. occupational forces?

When polled 70% of Iraqis have said they want the U.S. to leave.

When Iraqi oil wealth is now estimated to be $79 billion, why is the U.S. not insisting they pay for re-building infrastructure?

Demolishing the U.S. dollar, bringing it to the lowest interest interest rate in 40 years, was a bonanza to U.S. exporters.  U.S. realtors have sold out many valuable U.S. landmarks, while generating exasperating inflation for the U.S. housing market.

The British pound is more than twice the value of the pathetic dollar value.

The Euro fluctuates between 40% and 50% more than the U.S. dollar.

Now the total irrationality of what the Bush administration has done economically finally sinks in.  Bush entered the White House after two elections that many believe placed him there unfairly.

Bush had a surplus when he began and now all across the U.S.A. people are hoping that the $100 to $200 billion will bail out Fannie Mae and Freddie Mac in those mortgage debacles.  

The $700 billion bailout will hopefully save the U.S. economic system.  

Bank executives who have run their banks like gangsters should be tried for criminal fraud.