Damage Control

That is how I would describe everything that has flowed from the White House in response to the meltdown in the US financial sector. Staunch the wound and hope that the body doesn't bleed out before it clots.

$700 BILLION as a bailout. From an incredibly conservative, get government out of the way of private business, administration. Who could have predicted it? And now President Bush is forced to use up what (little, very little) political capital he has left to get it through a reluctant Congress as they prepare to face their constituents. Not that Congress has much choice -- some action is obivously needed.

But what really made me think of damage control was this story:

The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, the Associated Press has learned.

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation.

Ah but of course. If the cause of the meltdown was fraud/malfeasance/illegal activity of some kind then the system doesn't have to be changed. Maybe some more oversight but not a major overhaul. So nothing really changes. And the rich get richer while the gap between them and the poor keeps growing.

PS> at coffee earlier this week someone pointed out that after 8 years of Reaganomics there was the S&L fiasco. Now after 8 years of Bush/Cheney and their "do your patriotic duty, get out there and spend" approach to war we have the greatest threat to the US economy since 1929. I am sure there is no implied correlation...