What the hell is going on? We thought the worst was behind us, but it wasn’t, thanks largely to fallout from the Standard & Poor’s downgrade of U.S. credit brought on us by the incompetence of our alleged national leaders.
Only three short years ago, the world financial system was on the brink of disaster after Lehman Brothers went broke in September 2008. Those scary times seemed to have disappeared in the spring of 2009. But now, things are even scarier.
Our current mess is different from the Lehman-related horror because it stems primarily from politics, not economics. The previous fear-fest came about because Lehman’s bankruptcy disrupted financial markets in unanticipated ways. Today’s crisis was completely avoidable. You can blame it directly on the fools who brought our country to the brink of defaulting on its debts in the name of saving us from . . . I’m not sure what.
Yes, the tea party types bear primary responsibility — but they couldn’t have done it without the cowardice and incompetence of the Obama administration, which let things get way out of hand. This whole fiasco just enrages me. And it ought to enrage anyone who wants the United States to act like a real country rather than some third-rate failed state run by fanatical factions that hate one another.
So why do I say today is scarier than 2008-09? Because this time not only have we got troubled financial institutions to deal with, but we have serious, substantial countries facing possible default on their debts. Including, heaven help us, this one.
Things were already bad because of fear and financial fragility afflicting Europe. But the problems took a quantum leap because of fallout from S&P’s totally justifiable Aug. 5 downgrade of U.S. long-term debt. The U.S. economy was listless enough, with gross domestic product barely growing — and maybe even shrinking — plus record long-term unemployment. (One telling statistic: The percentage of U.S. adults with jobs is down to 58.1 percent, from 64.7 percent in 2000, according to the St. Louis Fed. That, my friends, isn’t good.) The fear, loathing and political divisiveness are going to make things worse, not better.
Now, a few facts. The S&P downgrade is not — as some hate-filled knuckleheads inside the Beltway and in the hinterlands keep repeating — from fear that the nation is “broke” or lacks the financial ability to meet its obligations. S&P’s primary worry is that the United States might not summon up the political will to pay its debts. (Read the analysis for yourself at standardandpoors.com/ratings/us-rating-action/en/us.)
The escalation of our problems can’t be attributed to Angelo Mozilo of Countrywide Financial, a favorite villain. You can’t blame it on the other favorite bad guy, Goldman Sachs, or on the other usual suspects: Wall Street in general, greedy lenders and speculators, irresponsible borrowers seeking a free lunch by taking out mortgages they had no chance of repaying.
The root of our current problem is that there are no grown-ups in positions of serious power in Washington. I’ve never felt this way before — and I’ve written business stories for more than 40 years, and about national finances for more than 20.
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