March 08, 2009
Maybe you didn't catch the news but three major financial institutions were renamed recently, or at least they should have been. From now on, until the administration comes up with a real solution for the banking crisis, the new names of these institutions will be:
Citi Zombie Group
American International Zombie Group
Zombie Bank of America
The banking crisis is the circumstance that is the cause and in fact the crux of this entire problem, but almost every other ancillary subject is being addressed first by team Obama. Somehow we have time to address the funding of manure odor control but haven't yet lifted a finger to arrest the free fall of the stock market. As a leading indicator of where the economy is heading, the stock market at this moment sees no upside in the policies that team Obama has promulgated thus far.
Starting with President Bush and now continuing with Obama, the government has been pursuing an ad hock, piece meal solution to the banking crisis. Drips and drabs of government bailouts going in every direction with seemingly little to no rhyme or reason. Bush didn't have a choice really, he had to at least hand Obama a banking industry on life support rather than handing him a dead banking system. But at this point the government is simply propping up these institutions that have long since stopped being viable as money making businesses. Welcome to the world of zombie banks. Remember Japan in the nineties? Well, we're basically there now. No use in denying it.
Another fact that there is no use in denying is that we have now advanced into the territory of socialism. This country has been slowly marching towards European style democratic socialism for a while. Now Obama is sprinting towards it with all this spending and proposed wealth redistribution. But for political reasons, Obama and his supporters have to deny that their policies even vaguely resemble socialism. I'm not sure what the big deal is, if it walks like a duck, quacks like a duck...
It's socialism, so what. Maybe in this time of crisis we don't have a choice when it comes to resolving the problems caused in the banking sector because these institutions were allowed to become 'too big to fail'. So while Obama figures out a way to solve the banking crisis while not appearing to be socialist because he's afraid to be called that, I have the solution. Since I'm not a self-hating self denying socialist like Obama, I don't care if you call the plan I'm advocating socialist.
The only remaining solution to the banking crisis is temporary nationalization of the biggest most troubled banks. The share holders won't like it, but right now the entire market is in a free fall because there is no clear policy emanating from the White House. Is there any disputing that the lack of clarity is causing massive uncertainty in the markets? This should be elementary, but because team Obama has to play political games, they haven't embraced this obvious strategy yet.
This is what they will eventually do of course, just as soon as they devise a clever way of not letting it be called socialism somehow. So while America collectively watches their retirement funds evaporate into the ether, team Obama is busy calculating their own political appearance and concocting childish controversies about Rush Limbaugh.
Until Obama gets over his fears regarding what his detractors will be able to say about him, we will live in this new American Zombie economy.