THE REGULATORS

Let's do a little critical thinking. Reach into your wallet and pull out a one dollar bill. (Assuming you have any left after the financial chaos of the past week.) Hold it up and take a long look at it. Now ask yourself a few questions. Why is this piece of paper worth a dollar? Who decides how much it's worth? What keeps it from being damn-near worthless like so many other foreign currencies that have failed? Will it always be worth a dollar? What exactly is a "dollar"?

The main reason that dollar in your hands is worth a set amount of goods is because you believe that it is. Faith is the true currency. You believe that when you accept that dollar from someone, you will be able to use it in the same way to buy something from someone else. If you start to doubt that for one instant, it all falls apart.

The best way to view a currency from any country, is to think of it as stock in that country. If your country is powerful and stable, your "dollar" is worth more. Likewise, if your country is failing, your stock falls. Once again "faith" comes into play. In order for your dollar to be safe, people around the world have to have faith that your country is stable and financially secure.

And so we get to the problem that has faced our financial markets this week.

Around the world, that "faith" is on the decline. The main reason is because we have become a debt society and a debt country. When other countries look at our balance sheets, they see a country that has no savings to fall back on should things suddenly go south. Our houses are borrowed on beyond their worth. Our credit cards are extended beyond what most of us can afford. Our banks have taken all their assets and put them on the table as bets on Wall Street with nothing to fall back on should these bets fail. With no assets to borrow against, it's hard to imagine a way out for our middle class. Foreclosures are everywhere, and with fewer people able to buy, house values are falling to a point where it's no longer profitable for contractors to build.

How did we get here?

A look at the history shows lots of blame to go around. Both Dems and Reps have had their hands dirtied in this mess. Rather than do the right thing long-term, they all opted for the quick buck. We live in a "quarter culture", where our CEOs, our stockholders, our politicians and even our population only looks at the fiscal quarter to see how they are doing with very little concern over the long term. Our Presidents all encouraged such behavior by removing the barriers against spending more than we even have. G.H.W. Bush deregulated, Clinton deregulated, and Dubya deregulated. The only thing that mattered was how things were going right now. Unfortunately, the future no one cared about is now.

The blame can be spread out, but examination of the players shows the same names popping up all over the place. In the early '90s, the Savings and Loan Scandal raced through the financial markets. Spurred by deregulation brought about through bank lobbyists, S&L's sold bonds that had no real assets backing them up. When shady corporate weasels funneled off the only money in the system, the taxpayers were left holding the bag to the tune of $160 billion dollars. Privatized profit with Socialized risk. Infuriated, the taxpayer demanded to know what happened and the Keating Five found themselves in the spotlight. One of the "Senators for hire" was none other than Senator John McCain. Among the big benefactors was the Bush Brothers, Jeb and Neil. The deregulation was pushed through by their father, George H.W. Bush. Working with him behind the scene was Texas Senator Phil Gramm.

Fast forward to the present. Phil Gramm, who until recently was John McCain's financial advisor, was instrumental in the most recent wave of deregulation. G.W. Bush has allowed the banks to operate with nearly no oversight. Oil companies are practically guaranteed alternative energy is kept on the back burner and profiteering will go unpunished. Once again John McCain is front and center and once again we are supposed to believe he didn't have a hand in the cake even though his face is covered in chocolate.

We, the taxpayers, are now on the hook to the tune of nearly $1 trillion dollars. The industries that made the most during the run up to this crisis are having their debt cleared because we can't afford to let them fail. The very fact that we fell for this twice is disturbing to say the least. That we need more regulation and oversight of our financial institutions isn't even debatable. Now John McCain wants you to believe that the same people that created this mess twice are the ones to trust to fix it. Well as G.W. himself once said, "Fool me once, shame on me. fool me......." well, you get the idea. H.C.