Parsing the President

The Guide to Economic Salvation for Dummies [author translations in bold]:

SPEAKER: PRESIDENT GEORGE W. BUSH: Good evening. This is an extraordinary period for America’s economy.

We’re (word that rhymes with) plucked. 

We’re in the midst of a serious financial crisis, and the federal government is responding with decisive action.

We’re clueless, but that won’t let that stop us taking decisive action.

Most importantly, my administration is working with Congress to address the root cause behind much of the instability in our markets.

We, the unknowing, are throwing you, the unwilling, under the bus, to save the unconscionable. We have messed up so much, for so long, at such great cost, we are now qualified to do nothing with everything. (© Mother Teresa.)

This rescue effort is not aimed at preserving any individual company or industry. It is aimed at preserving America’s overall economy. 

I repeat, this crisis is strictly contained to housing. OK, a teensy bit leaked through but only to commercial real estate, the automobile industry, retail, credit cards, gas guzzlers, and the job export industry. Other than that, tightly contained.

First, how did our economy reach this point? Well, most economists agree that the problems we’re witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business. This large influx of money to US banks and financial institutions, along with low interest rates, made it easier for Americans to get credit.

The war on drugs is working out as well as the war on terrorism. Damn furrn’uhs. 

Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit, combined with the faulty assumption that home values would continue to rise, led to excesses and bad decisions.

Greenie, you did a heckuva job.

See, in today’s mortgage industry, home loans are often packaged together and converted into financial products called mortgage-backed securities. These securities were sold to investors around the world. Many investors assumed these securities were trustworthy and asked few questions about their actual value.

Moody’s sprayed gold paint on wet newspapers, so we could meet margin calls on the cocaine bill. 

With the situation becoming more precarious by the day, I faced a choice, to step in with dramatic government action or to stand back and allow the irresponsible actions of some to undermine the financial security of all.

Bribes to Republican legislators declined dramatically.

I’m a strong believer in free enterprise, so my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. 

I also believe in small government operating under tight fiscal disciplines. But Goldman is running out of counterparties.

The government’s top economic experts warn that, without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold.

Fred Reserve is running out of Depends. 

Fellow citizens, we must not let this happen. I appreciate the work of leaders from both parties in both houses of Congress to address this problem and to make improvements to the proposal my administration sent to them.

We, the unknowing, are pushing you, the unwilling, off a cliff, to save the...Sorry, I already said that.

In close consultation with Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke, and SEC Chairman Chris Cox, I announced a plan on Friday.

That started the run on Depends. 

First, the plan is big enough to solve a serious problem.

Bribes to all legislators have declined dramatically.

Second, as markets have lost confidence in mortgage-backed securities, their prices have dropped sharply, yet the value of many of these assets will likely be higher than their current price, because the vast majority of Americans will ultimately pay off their mortgages.

Just not the mortgages included in the wet newspapers Hank wants to buy. 

The government is the one institution with the patience and resources to buy these assets at their current low prices and hold them until markets return to normal.

Clearly the market is wrong here and one of the hallmarks of capitalism is the ability of the government to know better than the market.  I think that famous economists Stalin and Mao Tse Tung got a Nobel for figuring that out. And Warren Buffett won’t be around forever. The wet newspapers, however...

The federal government also continues to enforce laws and regulations protecting your money.

The federal government is thinking about getting round to enforcing laws and regulations protecting your money. In the meantime, we’re beating the carp out of everybody who saw this coming.

Once this crisis is resolved, there will be time to update our financial regulatory structures. Our 21st-century global economy remains regulated largely by outdated 20th-century laws.

The crooks get a pass. The innocent will, however, be hunted down, persecuted and jailed. The new reality show about this will be great.

In the long run, Americans have good reason to be confident in our economic strength. Despite corrections in the marketplace and instances of abuse, democratic capitalism is the best system ever devised.

In the meantime, democratic capitalism has been suspended until further notice, for financial institutions. Individuals, and especially those facing foreclosure, should consult a bankruptcy lawyer for further information. 

Our economy is facing a moment of great challenge, but we’ve overcome tough challenges before, and we will overcome this one.

Please visit the Department of Homeland Security’s website for instructions on stockpiling duct tape and plastic sheeting. 

And together we will show the world once again what kind of country America is: a nation that tackles problems head on, where leaders come together to meet great tests, and where people of every background can work hard, develop their talents, and realize their dreams. Thank you for listening. May God bless you.

It’s been fun, and I’ll be watching this play out from the bunker in Crawford. Thank you for playing.

President’s Address to the Nation

Felix Salmon drinks the Koolaid
Portfolio Sep. 24 2008

Comments

[Robert Sare...:]

Nice speech! I wonder where the rest of America is?

2008 Sep 26 08:14 AM

[OldLimey:]

Great stuff.

By the way, I see NZ's officially in recession. Did nobody down there ever take the course on fiddling figures? Too honest by half.

2008 Sep 26 08:22 AM

[john s. gordon:]

regulations have been suspended/ignored for the last 8 yrs by orders of the emperor george w. white house. don't pin the blame exclusively on greenspan.
> jack

2008 Sep 26 08:46 AM

[Urbane Gori...:]

EXCELLENT!!!! I sure wish you lived in town... I'd buy you a beer and listen for hours!!! jegan ;-)

***VOTE REPUBLICAN AGAIN!!!!
NOVOCAIN/PAIN in 2009!!! ****

2008 Sep 26 02:02 PM

[sumosama:]

jack, it goes back a bit further than gwb...nice try though!

2008 Sep 26 02:25 PM

[henarl:]

Yep, all the way back to FDR, our first Imperial President.

2008 Sep 26 05:49 PM

[AV:]

Right on the money! Where did they pull the $700 Billion figure out from? Same box of numbers where they pulled out 1000s of WMDs in iraq? Or the box where they pulled out - '6 weeks' is all we need in Iraq.? These guys are clueless - McCain is as clueless as GWB - but it sucks more because he's had 26 years to get a clue. GWB was just a lousy drunk most of his life - there aren't many brain cells that survived the onslaught.

2008 Sep 27 10:42 PM

[Logically Rich:]

I wonder why 'hardcore' republicans really want to see America in a depression so badly? The bailout plan is really nothing more than an investment by the Fed to try to salvage some semblance or order - without it, the system will fall completely. Frankly, I don't really see much of a problem in buying questionable debts at 30 cents on the dollar; even if half the debts turn out bad, the gov't still makes those 20 cents back. I'm no mathematician or anything, but that means about 1.2 trillion coming back into the Fed's coffers for the 700 billion up front. Those are numbers Warren Buffett would be proud of. So save your political arrogance and accept that the bailout is not only a good deal for America long term, it's the only solution to stop the depression that would turn America into a third world nation. Think out it.

And by the way, if FDR hadn't acted how he had Japan would rule Asia and the Pacific and Germany would rule Europe and Africa - no intervention then would've caused impotence in America that would have made it totally unable to respond to the Pearl Harbor attack in anything less than two years instead of six months.

2008 Sep 29 12:36 PM