Wednesday, September 17, 2008

Consolidating Doubt

Since the days of the 1639 Exeter Combination, America's first democratically created social contract, Americans have combined in self-government to manage doubt.

Doubt. Uncertainty. Risk of random accident or sudden attack. We agree to cover each other's backs. We pool our risks, and with faith in a common good, we care for the least of us. We create a secure world, with poorhouses for those of us who fail.

Now, jobs have been disappearing overseas. At the ground floor level of the economy, less money is walking in the door.

Up on the second floor, mortgages are failing. People can't make their payments. They are losing their houses. Landlords don't get paid rent. They are losing their properties.

On the third floor, the banks that sold risky mortgages are going broke. A lot of risky mortgages were sold. It was profitable.

Having bought their way over decades into an unregulated economy, the financial business sector has enjoyed the risky fruits of the high branches, ignoring the ladder that held them there. As workers moved from punch-press jobs to french fry making, wages fell. The ladder lost its footing.

The mortgage failure reflects the failure of earned income to keep pace with inflation.

The government's solution is to bail out the failing corporations. Extend loans. It has not seen a need yet to extend loans to failing individuals and families. It has not seen the rightness of treating individuals at least as kindly as it does the corporations. Who rules America is apparent.

Now Newsweek notes that "We are all socialists". Ralph Nader tagged government support for the biggest businesses as "Corporate Socialism" back in 2002. We are all corporate socialists - we support socialism for the biggest corporations but are told that we humans still live under capitalism. Dog eat dog, survival of the fittest. It's Nature's Way. We are told.

It all depends on who owns the government. Right now, the corporations rather obviously own the taxes we pay. We are kept around only because they need hired help now and then.

Does the failure of AIG, America's largest insurance company have nothing to do with the losses suffered by insured victims of hurricane Ike last week, which laid waste massively? Our government has loaned money to AIG to tide them over until they can sell some assets, which presumably will enable them to pay back the loan.

Will government do this for the people? No, we are irresponsible.

Insurance companies cover each other's backs, too, and lend each other money. They pool the risk. By lending billions to AIG, our government is re-filling their pool as well. Our government is covering the aggregate cost of risk.

Ailing auto companies, ailing airlines, more ailing banks, any company that dabbled in derivatives - are now waiting in line hoping also to become wards of the government. These are tough times.

Who should receive our tax dollars? Us? The theory advanced by leaders is that by giving to big business, they are giving to us. People have been led to believe this. Leadable people.

At some point in the government's wandering voyage of discovery, the money is going to hit the ground. Government will find a way - under some new administration or other - to use our tax dollars to help individuals who are suffering. Not just corporations. They will realize that extending unemployment compensation keeps people in their houses, keeps renters in their apartments. And thereby makes big corporations stable.


From there, the economy will once again head upwards, a wave that will immediately benefit the businesses that serve us and the businesses that serve them. For now, though, our tax dollars feed lipsticked hogs.

By watching each others' backs, we will make sure there is no doubt, no risk, no attack.

There is no doubt that we will survive, those of us who stick together.

Those of us who vote.


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