My two-cent on the financial crisis

As no one really seems to understand the ramifications of financial crisis we’ve been pushed into, our government is trying anything it can lay its hands on to prevent a total meltdown and also push a dreadful scenario on the Republican Party come this November elections. I still remain convinced that our foolish Iraq war has constituted the “tipping point” for that crisis, which is nothing else than a “consumption overload” to keep American fat, happy and looking the other way. So, today, faced with a continued deluge of bad financial news, everything goes; our bailing out of investment banks is the finger in the dike holding back the tide of full-blown financial collapse.

What’s more amazing however is that not one so-called expert has seen that wave of financial disasters coming (subprime mess, securitizing of derivatives, collapse of investment houses). Where were the press and especially the Wall Street Journal which is both the financial standard and the pillar of conservatism in this country? Well, I guess, no one knows anything and the blind is guiding the blind as if today Bernanke were just a mere passenger of a jetliner and was asked to take over the piloting of the airplane in the absence of capable pilots; his main goal would be to avoid a disaster and to that end he’d be trying a bunch of switches and operations procedures hoping that one of them will keep the plane from crashing.

Like an airplane cockpit, our financial system has become so complex and so interrelated that it is impossible to find a sound emergency procedure; instead, it’s tempting to try “voodoo salvage operations”. Without question, Bernanke is faced with an impossible task but with only two levers that seem to respond; lower interest rates and making the dollar will even lower and be ready to print heaps of money. Of course, should he do nothing Wall Street will cry bloody murder... At the end of all this – assuming the economy makes it through it okay – we will all pay for that mess under the form of higher taxes, higher cost of living and economic slowdown. And it’s not just only us Americans, but the Europeans, Japanese and Chinese as well, if all of them want to keep on trading with us. At the all of the world (developed and developing) will pick up the tab for the policies Bush and Cheney triggered in the first place. Way to lead America!