Silver lining?

THE BOGUS ECONOMIST Oct. 14, 2008

So far, I've read six (count them) six articles by very smart people telling us why the current economic septic tank we're seeing is really a blessing in disguise. That is, we're being taught a lesson about saving money instead of spending it, exactly the opposite advice we got from George W. Bush who, you'll recall, told us after 9/11 not to save money but to "go shopping."

Far be it for a Bogus Economist to contradict so sage a man as our President, but I maintain there's another and more basic lesson to be learned from our local, national and global greed-mongers and the governments who are currently pumping trillions of dollars, euros, yen and whatevers to save the banks and restore borrowing to the level it should be. Briefly, we should all take out our notebooks and write in capital letters: "PEOPLE ARE NOT IMPORTANT. BANKS ARE IMPORTANT."

Now I am not insulting or condemning banks, mortgage companies, hedge funds or investment firms. All I'm pointing out is that the bailout of large financial companies contrasts sharply with the actions of the U.S. Congress tightening bankruptcy rules for individuals who found themselves unable to meet their payments. It was pointed out that some of these individuals took advantage of bankruptcy laws to get out of paying their bills - horrors!!! The feeling was to make going broke more painful and therefore, lowering the frequency of these sleazy people ducking their responsibilities.

Now let's look at Bear Stearns, Freddie Mac, Ginnie Mae and Morgan Stanley, not to mention the unfortunate Lehman Brothers. Besides setting a record for inconsistency in the enforcement of the law, Treasury Secretary Paulson and what's left of the executive branch did everything except handstands to get their hands on almost a trillion bucks with which Mr., Paulson could do whatever he wanted without any review or limitations. Fortunately some of the members of Congress slipped out of their hypnotic state and crafted a more sensible plan whereby the taxpayers at least got something out of it, but the principle stood out loud and clear: If you're big enough and rich enough, you can't be allowed to go under. The only ones that go under the bus are those small enough not to tip the thing over.

Again, the argument about whether the world economy could survive without the huge investment banks will go on. I'm not as concerned about the economic question as I am about the human one: How important are people?

Under the present system, it seems Joe and Mary Sixpack (or the Blow family) only have worth for what they can spend and therefore keep the wheels of commerce turning at as fast a speed as possible. We might publicly urge people to go to church, go to school or go to the library, but where we really want them to go is where President Bush told us - shopping.

As the courts, with the enthusiastic backing of major businesses, more and more lean toward the concept of treating corporations as people, it has seemed to many that what were stressed involved corporations' rights, but not their responsibilities. In other words, if Mr. Sixpack (or Blow) has to meet certain standards, then make Bear Stearns meet the same standards. If Bear Stearns is too big to fail, then repossess it, much as the FHA can repossess a house.

As we wander through the maze of "The Market," let's remember its invisible hand is more than capable of giving us the finger. The Founding Fathers didn't mention corporations in the Constitution for a reason. People live, breathe and die. It is for them America was built.

The Bogus Economist (c) 2008