These pundits suggest, almost smugly, that only they were correctly positioned by wisdom and ideology to have foreseen the coming debacle, but were rendered powerless to avert the tragedy by the evil forces of the GOP and its lemming-like followers.
The evils, of course, are a combination of corporate greed, conservative economics, and government regulatory failure, all of which must be addressed by greater government involvement in the marketplace.
Here's the take from the Left pole of the Delaware Blogosphere in particular:
From Delaware Watch (See What Happens When You Don't Regulate the Looters):
And when no one is minding the store, the opportunistic thieves and the bumblers break in....
But you know how the line goes. When the government regulates, it makes the operations of business worse and less efficient, blah, blah, blah.
The federal and state governments were so wedded to the cliche of "getting out of the way of the private sector," they didn't even bother to meaningfully enforce existing regulations on the looting lenders....
Now that the economy is flushing down the crapper, the Bush administration has suddenly discovered the benefit of regulating the erratic invisible hand of capitalism....
To which one of the commentators from Down with Absolutes responds:
I've said it for years, Dana. Unfettered capitalism like that endorsed by conservatives and the GOP only leads to sure disaster. We're only reaping what has been sown by the foolish leaders and piggish corporations in this country.
Here's the Term of the Day from Delawareliberal:
Republicenomics : An economic system in which business executives that make good decisions and appropriate investments do well and business executives that make terrible decisions and make horrible investments get bailed out by tax payers and do extrodinarily well.
There is no downside risk to being an investment banker when Republicans are in charge. Make risky plays that workout…GREAT! Cha-ching! Make risky plays that don’t work out…GREAT! The gullible US tax payer is there with his bottomless funds. CHA-CHING!!
The problem with all this liberal/progressive outrage and angst, as much as I respect Dana, mat, jason, and the others, is that liberals had no monopoly on seeing this one coming, and in fact the analysis available from the Libertarian end of the spectrum is considerably more complex (while being equally condemning of the Fed and the Bush administration) than the Punch-and-Judy-Bad-Rethuglican morality plays being offered to us.
Consider ProLibertate's Why Aren't We Furious?:
Imagine how outraged you would be to learn that a thief had stolen your identity and used it to siphon your savings in small, subtle increments, until you and your family are driven into destitution....
This is exactly what the Fed and the Regime it serves are doing to you right now -- bleeding your wealth with silent implacability. Over the past six months alone, the "dollar" has shed one-fifth of its value (as measured against other currencies). Run the math, which is simple enough for even Sean Hannity to understand (assuming that we s-p-e-a-k r-e-a-l-l-y s-l-o-w-l-y and illustrate our points with pretty pictures): At that rate, by mid-2010, the dollar would be entirely worthless.
But there's no reason to assume that the decline will continue at its present rate. None at all.
Things will only get worse from here.
Some analysts keep warning that the dollar may abdicate its role as the world's reserve currency, thus mimicking the trajectory of the last global imperial currency, the British pound.
These warnings were timely half a decade ago. They are badly out of date now: The dollar has already lost that status for merchants in Manhattan, investors and entrepreneurs in India, peasants in Bolivia, businessmen in Brazil ... that is, in the view of people who work, earn, save, and invest and have the option of conducting their affairs in currencies other than the Hegemon's increasingly worthless fiat scrip....
Consider the job performance of Congress since 2001. Through a combination of native corruption and emasculated deference to an overtly dictatorial Chief Executive, Congress has created the most imponderable government debt in history. It has permitted our nation to become mired in two distant wars of attrition, with a final estimated price tag of something in excess of $3 trillion. It has annihilated the Bill of Rights and common law due process protections while abetting the malignant growth of a militarized garrison state. It has institutionalized torture, the ne plus ultra of tyrannical depravity.
If job performance of this kind were subject to market discipline, practically everybody on Capitol Hill (with at least one noble exception) would be reduced to selling plasma. Instead, the incumbents who have wrought this disaster enjoy almost unassailable job security, making themselves wealthy while leaving productive people impecunious. Between 2004 and 2006, the net worth of the typical Congressbeing increased by 84 percent; the median net worth of senators was $1.7 million, that of the lowly tribunes of the masses in the House a mere $675,000.
Or how about Clusterfuck Nation's Real Freak Out:
Now, apparently, we'll also opt for a bail-out of all those who tried to become rich by getting something for nothing at both ends of the Ponzi scheme called the housing bubble -- the "little guys" who signed mortgage contracts they could never hope to pay off, and the Wall Street playerz who bundled these hopeless contracts into fraudulent securities (and their enablers in the ratings agencies, plus the hedge fund smoothies who tried to cash in by using recondite algorithms to dissolve the risk associated with imprudent lending.) The bail-out is likely to accomplish nothing except the more rapid bankruptcy of government at all levels and a second Great Depression at ground level (worse than the first one).
Over the weekend, the Federal Reserve engineered a $30-billion dollar Saint Paddy's day present for the JP Morgan bank by handing them the corpse of Bear Stearns. The object of the game is to prevent the "assets" of Bear Stearns from going to the auction block, on which they would be discovered to be nearly worthless, which would instantly render all similar assets held by the other big banks to be similarly worthless, and would result in a universal margin call that would pretty much unwind the hallucinated "wealth" acquired the past ten years.
Despite the heroics around the fate of Bear Stearns, it looks like the financial system is tottering anyway. Perhaps the last trick left in the rescue bag will be the 100-basis-point drop in the Fed rate rumored to be announced tomorrow. It won't help any of the big banks, since their problem is holding liabilities in excess of assets. Almost certainly it would crater the US Dollar.
The next thing in store for America, in my opinion, will be a rather new surprise: oil-and-gasoline shortages. While frightened money pours into the oil futures markets, driving the price up, strange behavior will start brewing in the actual physical allocation process. Imports of oil and gas to the US may not be as reliable as it had been when America seemed to be a solvent nation. The exporters may be changing their terms of doing business with us -- and that's nearly two-thirds of all the oil we need. The public would probably suck up oil price increases indefinitely, but shortages are going to be something else. A real freak out.
Or perhaps you'd rather that I just returned to my heroine, Becky (the Girl in Short Shorts) with How the Feds Tanked Our Economy:
The abscess has now exploded, and infected the world economy. The worthless securitized mortgages keep collapsing the stock market, and investors are running to the commodity markets to play their speculative, non-productive, paper economy games. And that, along with a dollar that is shrinking like a cheap T shirt, are causing food and oil prices to squeeze already-strapped consumers, and igniting the fumes produced by the inflationary practices of the Fed into an economic fireball.
To those who did not have blinders on, it was clear that the blight of toxic mortgages was beginning to deflate the real estate bubble in New England and the Northeast as early as 2006. The flip flopping property game had stopped, and the real estate pundits in the Sunday newspapers were pontificating on how it was now a buyer's market.
About this time Ben Bernanke decided that handing out the popular unverified income mortgages, and lenders' lack of concern about whether borrowers would be able to manage the terms of the loan once the introductory teaser rate expired, might be a problem.
Just like when the banks ran out of credit worthy persons to send credit cards to, they started pushing plastic on impoverished college students, by the turn of the century lenders had run out of worthy mortgage prospects, and started vigorously promoting and handing out these liar and guaranteed-to- default mortgages....
When the Republican Party bloviates about limited government and minimal regulation, they don't care about small entrepreneurs, who used to be the back bone of our economy (indeed the Republican creed is Small Business Administration guaranteed loans are economically disruptive and an unwarranted extension of big government). Rather, the concern is always the promotion and non-regulation of such things as Big Oil and the National Banks—the Federal government will not regulate them ( to the extent they can politically get away with it) and they won't let the states do it at all.
As always happens when there are situations like this, the Congress is grandstanding, advocating increased regulation by Big Brother, sending a few scapegoats to prison,and considering massive federal bailouts, which we can't afford and are economically disastrous.
[By the way, note to Dana: both of our worst fears have been confirmed. While researching this post I found a blog called The Progressive Libertarian, whose motto is The political philosophy built on three simple tenets: 1) the power of the free markets to most efficiently distribute in a resource-constrained world. 2) the power of individual choice in making the best decisions collectively for society. 3) that need for govenment in insuring the success of the first two points. These three simple tenets are the basis for our view on every important issue that affects America today. I'm still trying to determine if it would fit your definition or progressive or my definition of libertarian. Somehow, I can't imagine us married. LOL]
Do I have a point beyond saying, "Hey, Libertarians and real conservative economists saw this coming as surely as did all the liberals and progressives"?
I think so.
What worries me about the liberal/progressive take on America's current economic disaster (and potential impending depression--not recession, depression) is that their only answer seems to be, "Throw out the GOP and elect Democrats."
That's a political answer to a serious economic question, and what I've seen of both Barack and Hillary suggests that neither one has a very strong grasp on real economics, or even advisors competent to do anything beyond yearn rhapsodotically for the dimly remembered glories of the Bubba years.
What scares me to death is that our Democratic dynamic duo, combined with Senator "I don't know much about the economy" McCain, will waste the precious little time we have to do anything positive about this crisis (and there's not much), thereby leaving the management of the situation to Bush, our current lame-brain Congress, and the hapless Fed.
On the bright side: the next President will get the opportunity to declare plenty of bank holidays and style himself or herself as the new FDR with the New New Deal.
Just remember one thing: it took World War Two to pull us out of the last Great Depression.