To be a fly on the wall of this Saturday’s G20 meeting in Washington, D.C. on the global economic crisis. Germany declares an official recession. And between Thursday and Saturday morning, Hank Paulson may unveil three or four new course reversals.
WASHINGTON — The Treasury Department on Wednesday officially abandoned the original strategy behind its $700 billion effort to rescue the financial system, as administration officials acknowledged that banks and financial institutions were as unwilling as ever to lend to consumers.
But with a little more than two months left before President Bush leaves office, Treasury Secretary Henry M. Paulson Jr. is hoping to put in place a major new lending program that would be run by the Federal Reserve and aimed at unlocking the frozen consumer credit market.
The program, still in the planning stages, would for the first time use bailout funds specifically to help consumers instead of banks, savings and loans and Wall Street firms.
Treasury officials said they hoped to invest about $50 billion from the bailout fund into the new loan facility, with the aim of helping companies that issue credit cards, make student loans and finance car purchases.
On display for all is the continuing collective failure of the American governing classes (political and economic). The Treasury Department’s Inspector Generals’ verdict on the fundamental infrastructure to administer *any* portion of the troubled asset relief program (TARP)? “It’s a mess.”
Alas, the rest of the world is far ahead of the American people in recognizing the obvious truth. Americans are still besotted with self-generated mythos of competent State crisis stewardship. We know the short hand labels (‘FDR’, ‘WWII’, ‘Moon Landing’). The Iraq fiasco tore the veil off the Republican partisan claim to national security competence. September 2008 clawed down past the veil into the fatty tissue of the decadent and corrupt face of the entire political class.
Much has changed since those times beyond ‘Acid, Abortion and Amnesty’, Fiddy Cent and OJ Simpson. The sheer complexity and paralytic opacity of the American political economy 2008 subverts managerial enthusiasm and accountability. We certainly believe the current generation as a whole is largely not up to the task before them particularly because they know nothing of sacrifice of the type and scale required. This is a Nation of consumers and arbitragers (lawyers, accountants, financiers, etc.). Even if they want to be like Big Russ or Brokaw’s Greatest Generation, they have no real life resources to draw upon. Instead, they must summon symbolic imagery and serialized fictions of reality from movies, tv shows and ‘historical book’ merchandizing efforts as yardsticks. And in this sense, while ‘The New Media’ surely offers unprecedented venues voices and silos to collect expertise or the like minded, the end result is more cacophony and less insight in the aggregate.