• "The real roots of the crisis lie in a flawed response to China." and "these players were all peddling financial snake oil, but as Columbia University's Charles Calomiris observes, there will always be snake-oil salesmen." His arguments up to that point are reasonable but then he introduces a justification:
• "Rather, the key financiers were the ones who bought the toxic mortgage products. If they hadn't been willing to buy snake oil, nobody would have been peddling it." This is the old "everyone is doing it" excuse. This is the argument defense lawyers use for clients peddling drugs on the street. Drug dealers do not admit responsibility and guilt for ultimate consequences of their acts, to avoid jail they use the arguments of a child.
• But, there is an oversight in the analysis: He correctly sees the flaw in the failure to react. "After the dot-com burst, this cleanup-later policy worked fine. With the real estate bubble, it has proved disastrous... So the first cause of the crisis lies with the Fed, not deregulation."
• If too much money was lent and borrowed, it was because Chinese savings made capital cheap... the Fed was not aggressive enough in hiking interest rates to counteract that.
• Moreover, the Fed's track record of cutting interest rates to clear up previous bubbles had created a seductive one-way bet. " This is a good, clear and precise description of the events that created the "crisis".
• But, he is willing to excuse the failure to react to the "real estate bubble" but blames the "the Fed was not aggressive enough in hiking interest rates to counteract" the inflation bubble.
• Both were failures to anticipate followed by a failure to react, whenever there is more than one failure, all failures must be recognized before they can be fixed.

You and I, no doubt, would prefer an apology, by all our leaders but, Congress and the Administration are as unwilling to accept equality in this failure as they are to insist on their equality of power.

Nobody cares to know who had the more "seductive" excuse for their failure to act, they must first admit they failed to act in both putting proper safeguards in the real estate over expansion and in the failure to increase interest rates to limit the inflation effect.

Now with their new "Bailout", renamed "Rescue", they do not know whether to give money to the banks to spend as they wish or whether there should be rules they must follow.

1. Should the side that forced mortgages on the poor be allowed free reign?
2. Or, should the Treasure Dept. that failed to increase interest rates in time to counter the effect of loans from China.

• Anyone with faith in the Ethics and Morals of the rich and wealthy must explain why an institution that was given Billions of taxpayer money promptly arranged for a half-million blowout at a beach resort, ought to be allowed to do whatever they want with "our money."
• If additional data is needed, perhaps the fact that a financial leader was given over $400 Million Golden Parachute and hired as a Consultant at $1 Million a month.
• All these before the $700 Billion reach their pockets.

Perhaps it is time to "Throw the rascals out!" Or, should we wait until our "Severe Recession" deepens into a Depression? Hints:

1. We will decide in November 4th.
2. Experts disagree on what will solve the meltdown "crisis", or why.
3. None has mentioned a Public Works plan to fix our trasnportation and energy needs. Both Pres. FDR and Eisenhower thought it was a good idea and applied it.

"Borak Obama is more thoughtful on the economy than his opponent... and his bench of advisors is superior." Wrote Sebastian Mallaby in the introduction of this article. Polls indicate it might be a landslide, or a tsunami from coast to coast.

"America does the right thing at key times" said my History Teacher, while Ike was President, we were in the city blown away by storm "Ike", residents were left on their own. Pres. Bush Sr. and Clinton are helping, a repeat of their Katrina rescue efforts. 

MikeSar