In Case you Missed it, the Rules have Changed

I begin at 7:27 AM Pacific Standard Time. The Dow Jones Industrial Average is up nearly 6/10% from yesterday's close. Ye-haw. Can't wait for that quarterly report on my 401K to see how much retirement I don't have anymore. "Comrade" Paulson defended this week's continuous losses, with nearly 1,000 additional points shaved from the Dow's average, arguing that it's, "too early to look for encouraging signs." He might consider having the new temporary head of his bailout, a 35-year old from--you guessed it--Goldman Sachs, to look into getting some of that $85 billion back from AIG. Oh wait, the Fed's lending them another $38 billion.

It's 8:15 PST and the Dow is down over half a percent. . . .

I'm halfway through my lunch and the Dow has slid almost 3% since opening today. The Senate sweetened up the bailout (AKA "rescue") bill with tax cuts to get the House Republicans on board. How do they think we're going to pay for all of this? The "debt clock" near Times Square in New York had the dollar sign removed from it as another digit was added to our National debt--now over $10 trillion. The debt clock was first installed in 1987 when the debt was still just $2.7 trillion and when Reagan was still in office. Ah, the good old days of "don't tax and spend anyway" Republicanism.

In an oft quoted statement by Michael Hudson, Adam Smith said that no government had ever repaid its debts, and the same can be said of the private sector." For many, the free market system is more than just an economic strategy: it is the American ideal. The idea of the public seizing ownership of these banks which managed to fail--in spite of the hallowed doctrine of Milton Friedman, as espoused by Reagan, Bush and Bush--has the free market purists going insane right now. Most of them would like to let the market select which companies survive and which ones die out. The only problem is that, through a protracted war of attrition by the deregulationists, they managed to get what they wanted. And so, anti-trust violations went uninvestigated. Banks grew in size and dwindled in number. Suddenly we were faced with an ultimatum: rescue the banks--the ones that were allegedly too big to fail--or face a catastrophic economic collapse, the likes of which have not been seen for almost 80 years.

My lunchbreak is over. The market has fallen by nearly seven percent since this morning. My folks lived through the Great Depression. From the way the stock market keeps falling, it looks their kids get to live through one, too. I sure am glad we managed to save the banks though. . . .

It's 5:17 PM PST and I just finished working. The market dropped another 678.91 points (7.3%) today, closing at 8,579.19. An economist who was a clerk/pickup driver for the rental car agency told me that the market doesn't fall usually below the peak of the previous boom. I'm not sure, but I think the rules may have changed. The Dow last peaked at 11,723 in January of 2000 just before the Dot-Com bubble burst. Maybe I misunderstood him and he meant that it never dropped below the previous trough; if that's the case, we've still got another 344 points to go.

I'm optimistic. Those 344 points might just last me through lunch tomorrow.

The Bailout: Another Day Older and Deeper in Debt

I'm sitting at work right now. I have a meeting in two minutes. I've been watching the stock market since 7:15 AM Pacific Standard Time. The ticker tape on the lower right tray on my computer screen was up over a percent when I arrived; now it's down over 3/10%. Monday, the Dow declined over 300 points from Friday's close; yesterday it slid another 508.

When I started this blog, I named it according to where it looked like our country was going - long term. But here it is. Last Tuesday, the German magazine, Der Spiegel, published an article about the United States, entitled "The End of Arrogance: America Loses its Dominant Economic Role. In it, George W. Bush is described as a mere shell of his former self.

The ticker tape shows the Dow is down over half of a percent as I leave for my meeting. . . .

The meeting is in recess, and I'm taking a break. The ticker tape has the market down 1.6% for the day. My bank was seized and a quick sale was arranged to keep it from failing. I should breathe easy and go back to having my paycheck direct deposited, but there's really no barometer for knowing if or when your bank will fail like going in on Friday to deposit your check. Sometimes, when it looks unusually busy, I leave and go to a check-cashing place, where I forfeit a huge chunk of my earnings for the security of knowing I have access to my own money - unless someone steals it. The teller is safe behind the bullet-proof glass. The sun penetrates the plate glass windows, making the air stale in a place that already smells of cigarette ash. She counts out the bills so that the person in line behind me, who's fidgeting because he can't smoke indoors, knows how much money I'm leaving with. I put the cash in my wallet, slide the wallet into my hip pocket and walk swiftly out the door. I wait to unlock the door of my car until I'm just a few feet away, get in and immediately lock the door.

My meeting starts in two minutes. The Dow is up 3/10% so far for the day. . . .

It's lunchtime on the West Coast and the Dow is up over a percent. The debate last night was a poor showing for both candidates, though you wouldn't have known by its appearance on the front page. The big news of the day was in the Business section of the Los Angeles Times, "AIG Fiddles while Wall Street Burns." I understand that Nicholas II and Alexandra were similarly clueless as to the plight of the starving minions outside the Palace in the last days of the Romanov dynasty. Their opulent lifestyle, paid for by the struggle, sweat, blood and starvation of the many must have seemed outrageous to the people who saw them from afar. A failed insurance company that went panhandling to the people to the tune of, "Brother can you spare 82 billion dollars," may have a slightly different perspective of a $440,000 expenditure on such frivolity that those of us whose labors never yield the kind of posh lifestyle these folks appear to take for granted. Then again, when your salary is 300 times that of the average laborer - regardless of whether you win or lose - there would be a bit of a disconnect. What AIG's mishandling of nearly half a million dollars in taxpayer money shows, however, is perhaps the most salient factor in this culture of opulence: their appetite for luxury is not mitigated by their personal finances; rather, it is only constrained by their ability to acquire and dispense with, other people's money. When your accountant does that, s/he goes to jail for embezzlement. It was upon Milton Friedman's ideology of unfettered capitalism that such neoliberal kleptocracy was born.

My lunch is over. According to the ticker tape, the Dow down over 3/10% from yesterday's close. . . .

It's my afternoon break, and the Big Board closed an hour ago, with the Dow having lost another 2%, or 189 points, closing at 9,258.1 for the day. Our retirement plans have lost two trillion dollars over the last 15 months. It's okay. I've been steeling myself against this for years: there's no way a generation of 40 million can support one of 70 million in retirement - not when that generation hopes to retire at 65 and live until they're 110. Social Security, the promise made by FDR in the 1930s and kept by Tip O'Neil for the WWII generation, appears elusive. Perhaps the first wave of Baby-Boomers will get it, maybe even the second; anyone who can claim to have worn bell-bottoms in Junior High or earlier may want to consult their 401K.

Oh, wait. We lost our 401Ks in the stock market. The same stock market the free market fundamentalists wanted us to put our Social Security into. . . .

It's 5:01 PM, Pacific Standard Time, and my workday has ended. For now, at least, I'm one of the lucky ones: I still have a job and a home.