First Looks category archive

“1931,” was his answer.

Oh, so we’re going to be two years past the worst of the worst, I said, assuming he meant we’d be heading away from our equivalent of 1929, when Wall Street crashed and the go-go economy ground to a halt.

CEOs get away with stupid mistakes all the time. Some, like Robert Nardelli, the former CEO of Home Depot, drive their company’s stock low that their boards eventually oust them. But they leave with eye-popping going-away presents nonetheless. (Nardelli got several hundrd million dollars on his departure.) If you’re an average American who gets canned from his job, even through no fault of your own, you probably won’t even get unemployment insurance (only 40 percent of job-losers qualify these days). Conservatives tell us that unemployment insurance reduces their incentive to find a new job quickly. In other words, moral hazard.

Some CEOs use bankruptcy as a means of getting out from under pesky labor contracts they might have “known they could not afford” when they agreed to them (Northwest Airlines most recently, for example). Others use it as a cushion against bad bets. Donald (“you’re fired!”) Trump’s casino empire has gone into bankruptcy twice — most recently, last November, when it listed $1.3 billion of liabilities and $1.5 million of assets — with no apparent diminution of the Donald’s passion for risky, if not foolish, endeavor. After all, his personal fortune is protected behind a wall of limited liability, and he collects a nice salary from his casinos regardless. But if you’re an ordinary person who has fallen on hard times, just try declaring bankruptcy to wipe the slate clean. A new law governing personal bankruptcy makes that route harder than ever. Its sponsors argued — you guessed it — moral hazard.

I posit that each year of the war has been characterized by a central lie by the Bush propaganda machine.

Year 1: “There is no guerrilla war.”
Year 2: “Iraq is a model democracy.”
Year 3: “Zarqawi is causing all the trouble.”
Year 4: “There is no Civil War.”
Year 5: “Everything is calm now.”

I also suggest that John McCain is pushing for:

But on this morning in September 2006, Mancha, a U.S. citizen, found herself in a situation she never expected to encounter in her own home.

“I started to hear the words, ‘Police! Illegals!'” she said. “It seems as if those words still ring in my head today giving me that fear of them busting into my home. I walked around the corner from the hallway and saw a tall man reach toward his gun and look straight at me.”

UN inspectors were on the ground in Iraq and had not found a single weapon of mass destruction. Iran had stopped making nuclear weapons and was seeking a grand bargain with the west. The quality of the army was at an all-time high, the US had a budget surplus and oil was $25 a barrel.

Five years later, after nearly 4,300 US and allied military deaths and the wounding of another 30,000, the direct expenditure of nearly $1 trillion dollars, the deaths of hundreds of thousands of Iraqis and the displacement of millions, the US is still containing Iraq. Only this time it is containing Iraq’s multiple civil wars and propping up its weak and dysfunctional central government.

This wasn’t the way it was supposed to be when Bush took office in 2001. His supporters touted him as the first “MBA president” — Bush holds a masters of business administration from Harvard University — who would run the executive branch like a corporate CEO and manage the economy like a business.

But Bush’s Democratic critics contend that billions of dollars have been wasted on the nearly 5-year-old Iraq war and the large tax cuts he engineered have mostly helped the rich while doing little to lift the poor.

He now faces the very real threat of ending his watch in recession.

Adding to U.S. economic woes are record high energy prices, with Bush showing himself all but powerless to coax Arab oil-producing allies to increase production.

In a move that eclipsed the enforced rescue of Northern Rock (a British bank–ed.) six months ago, the 85-year-old Wall Street institution admitted it was looking for a buyer after being thrown a temporary lifeline by rival bank JP Morgan Chase guaranteed by the US central bank.

George Bush sought to calm fears of a deep recession in the world’s biggest economy when he said that despite the current “tough times”, the US economy remained fundamentally sound.

But the president’s words did nothing to dampen speculation on Wall Street that other blue-chip investment banks may also be facing a cash crisis as a result of their exposure to the collapsing US real estate market.

The ratings agency Standard & Poor’s responded to the rescue announcement by cutting Bear Stearns’s credit rating to BBB – the second-lowest investment grade – putting more pressure on its beleaguered stock.