God, the butterfly effect, and the mattress theory of banking

Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.” (NY Times, 9/26/08)

She's so tough. I think she's going to wash Bush's mouth out with soap and take away his TV privileges next. If we did what Bush really wanted (“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday) he would declare martial law and let Halliburton rebuild the economy. Even though NO ONE understands how this happened, it stinks like profiteering, greedy, deregulation happy Republicans and Chicago School-style of economic buccaneering.

I'm reading a book about McCarthyism and academia (No Ivory Tower, Ellen Schrecker) and what I'm learning is that catastrophes don't just happen. They build, and are propped up by a complicit system, and it's not always the black hat Republicans that are to blame. Truman's 1947 Executive Order 9835, a new loyalty-security program for federal employees, was supposed to protect the Democratic administration from the Republican party. That failed, but "it succeeded in establishing anti-Communism as the nation's official ideology, and several years before Senator Joseph McCarthy entered the scene." (Schrecker, p. 4) University faculty, trustees, and administrators acted on HUAC recommendations, and often before charges were laid against their employees and before they were brought before the commission. In this same way, I think that it is easy and right to blame lack of oversight, greedy (hopefully fucking criminally liable. GO ADAIRDEVIL!) Wall Street, and opportunistic politicians and lobbyists that paved the way for this financial free-for-all. In fact, I love doing that. But there had to be an infrastructure that was sympathetic, that benefited, and that supported this chicanery. This isn't ONLY because of 8 years of Bush, and 12 years of Republican control in the Senate and Congress.* Too bad my knowledge of market trends and fluctuations is limited to knowing that my only investments in the world are not protected by the FDIC. (Goodbye, sweet 401K. I knew investing in my future was a mistake.) Zack Exley, in an interview with finance writer Max Wolff at HuffPo summarized the market crisis in this way:

"So let me make sure I understand this. Big investors made trillions in bad loans over the past couple decades. Everyone just realized it and now markets are flipping into turmoil. Treasury Secretary Paulson and other financial big wigs decided that without intervention, we'd get into a 1929 free fall. And so they stepped in and said, "Everyone can stop panicking, because we'll insure all your bad loans." Is that right?"

I think it's the "flipping into turmoil" part that we don't understand. When the movements of the market are explained by Chaos theory, I think I'm not alone in my confusion. (For real, economists that study chaos theory are called chaologists. There's a word for WordTwist. Bastards. Why aren't "noir" and "het" WordTwist words, but arcane alternate spellings of Arabic words are? Whatever, "jehad".)

*Actually, since I'm blaming my first white hairs, Sarah's catne, and the continuing popularity of the combination of leggings and skirts** on Republicans, maybe this is their fault too.

** As a child of the 80s, I would like to stipulate that I adore the combination of leggings and baggy sweaters with boots. Bring that back and send ugly tshirt material dresses back to the void.