Where the Global World Hinges: Open Pandora’s Box or Ali-Baba’s (Destiny)

Sunday, September 28, 2008 (0630 GMT)

The u.s. administration [of Henry Paulson] initial plan and rhetoric of the President to infuse
capital [to the twin (GSE’s) government sponsored-enterprises] & generally to buoy the anguished
financial system showed inconsolable opposition even among Republicans in Congress since conservatives
were worried about the backlash it could produce.
This evolves around the idea of approving an [interventionist] govt function which through
funneling tax payer’s money into the financial mess which is considered a reviled quasi-socialist doctrine,
but a generally supported programmed antidote by liberals. This system does not impact the defense of the
majority [main street] as it does not protect the taxpayers and in fact; drags and bleeds it just to console
wall street [& its elite corporations].
But it maybe the quick fix (especially if the taxpayer’s won’t mind) & especially for an
administration which have reached political lows [burdened by a cumulative criticism & pessimism of
everything in a state of the nation], an overspent war expenditures [that could easily already topple $1
trillion], was the compelling factor on reaching out to get an immediate bipartisan agreement to achieve
the requirements & purposes of the bailout in its entirety.
Although, the U.S. Congress has given extra and manifest authority to Sec. Paulson to fix the
[mortgage crisis and credit markets] with extended capacity, and that the mortgage insititution; Fannie Mae
(the Federal National Mortage Association) & Freddie Mac (Federal Housing Mortgage Association) have
been both created with a federal charter to observe its credit guarantees, its unsure how accommodating
progressives in Congress approve a meaningful and rapid implementation of the administration resolutions.
Existence of millions of unsold homes due to the collapse of mortgage credit (& generally credit
flow of money firms/ sources) thus mortgage based loans have stalled refinancing and contributed to
delinquency to foreclosures (1.2%/ quarter) in a visceral cycle (& catch-22) which began at the onset of
defaults, plummeting assets, capital losses [from all lenders to even Fannie Mae itself & perhaps even
plugged/ strained the other giant, (FHA) Federal Housing Administration] & homes equity values [stock
equities] from investment banks, mortgage to individuals. This has had adverse effects on the american
consumer culture and the ability to bankroll everything including the purchasing power of credit cards since
their exist an undying low savings culture comparingly to any developed nation in the world.
An eye to current economic data would scrutinize the damage wrought by this crisis [since late
2006 up to current] in terms of stock/ bond values, losses of companies, employment and consumption
decreases, effects generally in the middle-class and households, government debts or deficits incurred,
business startups & shutdowns (filings of bankruptcy), property and manufacturing sectors, inventories,
retail growth (2.2% /annual) trade growth or reduction figures. Although news about the current economy
reached exaggerated levels when its been likened to worse than the Great Depression of the 30’s, actual
economic destruction is still unquantified but its improbable to reach those kind of enormous displacement
since the real economy continues to hum exclusive of the housing, investment banking and autos, and far
from such massive unemployment levels (6.1% [+1.4% from Aug. a year ago.). Although these problems
entails retrenchment in many fields, but most particular will be income, then tax revenues, compulsory
increase of welfare spending and saddling of deficit spending which the government will be weighed-down.

The energetic and hopeful senator Barack Obama and company seem genuine to commit to an
intelligent and real meaningful resolution and not unnecessary delve into circuitous political posturing that
could lend itself to the voters’ negative psychology of appalling stewardship of the economy under
Republican hands. [Although the Democratic Party’s relations with Fannie Mae; contributions, its
executives and compensation schemes is well-known]. Both could be extended for political gain but at the
cost of agonizing Americans.
But for the conservative senator from Arizona, he should push a remedy in Congress that would be
unstinting; policies backed by ample reserves cover debts & guarantees of federal chartered institutions,
loans for other mortgage companies/ money-market funds firms, and especially cover for central bank
exposure of foreign governments; and prevail upon to extricate fanatical mind-sets of many in relation to
idea of welfarism that goes against Republican values - to recognize the realism that the flawed economy
and the world are imperfect, and need to pursue the higher obligation of supervision for human unity and
purpose to achieve its social and spiritual concord and cohesion.
If he has historically disassociated himself with the current administration regarding failed
[economic] policies (which was of course politically expedient), it would be bullish and clever for him to
ride on any politically and psychological gains this bailout should produce (since this was a Bush’s
Administration initiative), due that it was straightforward, accommodating, sincere and good-intentioned
plan. Senator McCain could also be part and attendant of the success that Democrats (may lay itself claim
in Congress when this pushes thru) as he has conscientiously called for a bipartisan solution to this concern,
and must have that flair to politically muddle through the possible wrangling [among parties], that would
prolong and abuse this urgency, that could deter and muddy the uprightness and repute of the new blood of
Democrats and Republicans who has taken the pledge of oath; to restore the republic for which it stands,
one nation under God, indivisible, with liberty and justice for all, for the welfare of its people even of itself.

Victor G. Tobias
Metro Manila, 1503 Philippines
Email: vgtobias@yahoo.com