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Why We Don't Trust You – or – Pre-Emption Is Dead! RIP.

So, the much ballyhooed bailout is dead… for now.

Do we need a bailout? When you have companies with sterling credit ratings like Caterpillar and McDonald’s stuck in financial limbo because the banks resist loaning them money, it seems obvious that something needs to be done to prevent a financial calamity. But I, like most of the public, won’t pretend to like this bill or trust any of the players involved.

President Bush, commander of the worst public relations administration in memory, who probably lost all credibility over the lack of WMD’s in Iraq alone, failed utterly to convince the public that this bailout is needed. Meanwhile, Barney Frank, Chris Dodd and other members of congress who are trying to pass the bailout have their fingerprints all over legislation, regulation, and policies that helped create the current crisis in the first place. From MSNBC:

“Many of us feel that the national interest requires us to do something which is, in many ways, unpopular,” Rep. Barney Frank, the Financial Services Committee chairman said , before the vote. “It is hard to get political credit for avoiding something that has not yet happened.”

BTW, this is the same Barney Frank who, in 2003 rejected calls to regulate Fannie Mae and Freddy Mack because he didn’t seem to think their mismanagement would lead to any economic repercussions.

“The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the Federal Government doesn’t bail them out”.

Oops! But you see what I mean. The same person lecturing everyone else about their lack of foresight seems to be lacking of the same quality.

But he’s certainly not the only one who has egg on their faces. Bush and the Republicans during the 2004 elections, vigorously held up the housing boom as a reason why republicans should be reelected, a boom which we now know was built on the unethical lending practices encouraged by congress. He also heavily promoted the notion of investing a portion of Social Security into the stock market. That doesn’t look so wise at the moment.

The constant negative reporting of business who make large profits by the main stream press has poisoned the public collective consciousness against virtually all large corporations, especially if they made a profit. They are inherently evil. And all CEO’s who earn lots of money, deserving or not, are overpaid criminals. The public, wanting revenge on a perpetually corrupt government, big business, banks, and Wall Street, does not approve of the bailout by a wide 70% margin. This being the case, is anyone else surprised congress, fearing voter backlash, couldn’t get a bill passed to save the economy from imminent utter collapse?

Perhaps part of the problem is that this is an act based of the idea that, if we don’t act now, thing are only going to get much worse. In other words – this is an act based on preemption, an idea that has lost all appeal thanks to the difficulties faced after the preemptive invasion of Iraq. As I noted last week, even those who were for the preemptive invasion of Iraq are opposed to this preemptive action to try and stave off an economic recession or worse. Sarah Palin got hammered for not knowing that the concept of preemption is the basic tenant of the Bush Doctrine. Maybe it wasn’t a bad thing after all; she won’t need to know it anyway since the public and some in congress no longer favors the concept.