The Dow Jones Industrial Average dipped below 10,000 for the first time in four years. Guess that means that bailout/rescue bill didn't suddenly ignite the investing engine of the United States middle/upper class. Kind of a sad time with all the bouncing up and down of the stock markets. With the future of the market looking so rocky, this definitely isn't the best time to get in.
Nancy Gibbs writes a very poignant and well thought out article for Times magazine about the true winners of the financial crisis: frugal financial conservatives. I agree with her, the fact that there have been few voices that have encouraged the American people to do something that led to our financial might, save money, is disconcerting. After 9/11 we all remember President Bush telling us that the best way to fight back against the terrorists was to "go shopping". Now, while we are in a crisis it has still been the Administration's message that a reduction in spending is a sign of our economies weakness although our US savings rate has been going negative since late 2000. The only other time the US went negative in their savings rate was a period during the early 1930's... remember how that turned out? Not Pleasant.
Maybe more people should be listening to the Concord Coalition, one of personal favorite groups, when they talk about how saving and paying down the national debt instead of adding on 4 trillion (thanks, President George W Bush) can lead to a return to financial safety. Who would have predicted that spending more than we earn would lead to a credit crisis? I mean.. who'da thunk it?
The last item is today's Cronyism Watch:
Treasury Secretary fresh off his victory in passing a bailout bill (although not quite as empowering as he'd have liked) has decided that with that legislative mandate he'd do something that has become commonplace in this Bush Administration, hire friends and people from the industry to regulate themselves.
Paulson hired Neel Kashkari to oversee the Troubled Assets Relief Program and the newly created Office of Financial Stability. Mr. Kashkari worked as assistant Treasury secretary for International Economics and Development and had joined the Treasury Dept. in July 2006 and worked on several of Treasury's initiatives in response to the housing crisis - including the formation of the mortgage industry alliance Hope Now.
So, this fellow was suppose to be stopping the sub-prime mortgage crisis from developing further.. by forming an alliance of the people who got us into the mess to begin with. Wonderful. I guess his HUGE success in stopping any further problems from erupting got him his promotion to assistant Secretary and now his throne as the dispenser of 250 BILLION dollars by December 31st, 2008. Nice. So failure has been rewarded with promotion and powers never thought possible in US Financial history.
Seems like a typical Bush Administration story.. but something doesn't seem right.. It just isn't dirty enough. Was he someone important's roommate? Did he help someone cheat or hold great parties? Did he give/raise huge amounts of money for someone's campaign? Nah.. not really. Hmm.. well what did Financial Czar Kashkari do before he dedicated his life to public service at the Treasury Department in 2006? What's that? OH, HE WAS AN Vice-Presidential EXECUTIVE AT GOLDMAN SACHS! It seems as though Treasury Secretary Henry Paulson, himself a former topman at the Goldman Sachs firm, has been filling the Treasury chock full of his former buddies from Goldman Sachs. Paulson’s inner circle already includes former Goldmanites Dan Jester, a financial institutions banker, and retired banker Steve Shafran, who focused on corporate restructuring at Goldman. It also included Robert Steel, who has since left Treasury to become CEO of Wachovia.
I know that a bit of cronyism is perfectly normal in politics. Every politician, and in fact normal person, wants to surround themselves with people they trust. When it comes to the government though that person should also be able to do the job they were hired to do in a fair and competent manner. One would think that the ultimate picture of cronyism and nepotism was JFK appointing his brother, RFK, to be Attorney General but guess what? RFK was competent and did an OK job. FEMA headman Micheal "Heckuva Job Brownie" Brown was not.
What a joke this Administration has become. We have come to expect the worse from the Government and not even hope for a change. Whoever the next President may be, I wish them luck cleaning up that mess. They are going to need it.
Paulson taps bailout chief - CNN Money
Feel free to comment, I'd love to hear what you think!