The election went pretty much as predicted. A few more Republican seats in the House, but in the Senate and Gubernatorial races, things went pretty much like the polls were indicating they would.
So, what does it mean, and where did things go so wrong for the sea-change for hope and change that happened in 2008?
I agree with our president when he says Republicans drove the car into the ditch. It wasn't entirely them, though. Bill Clinton signed the repeal of Glass Steagall into law, and that was probably the most identifiable proximate cause of the credit default swap and collateralized debt obligation debacle that caused this current economic crisis.
However, it was a Republican congress that was too cozy with Wall Street that pushed that and other nonsensical, pro-bank legislation. George Bush was at the helm of the world's largest economy for 8 years. He bears the blame for this situation to a far greater degree than his Democratic successor or predecessor.
What I saw in this election was an American population that was fearful, angry and tired of waiting.
The fearful part? This economic collapse was so widespread that it affected huge swaths of the population. Even friends who kept good jobs had work-weeks reduced and bonuses eliminated. Yes, obviously, I don't have any friends on Wall Street.
I don't think there was much our president could do about people's anxiety.
However, the angry part? I can relate. I'm mad as hell, too, and I really wish I didn't have to take it anymore.
The Obama administration has been trying furiously to spin the TARP as something positive. It is true that TARP started under George W. Bush. However, the Obama administration and President Obama, himself, have embraced it whole-hog. Congressional Democrats voted for TARP to a greater degree than Congressional Republicans.
Nothing the Obama administration does has been able to do anything but infuriate the voters on TARP. For a while, they were trying the tagline, "it wasn't fair, but it was necessary."
That made voters furious.
Then, they tried, "It is going to cost much less than originally anticipated".
That still made voters furious.
It's as though the folks in Washington are completely oblivious to the fact that when people are sufferring, the last thing they need to be reminded of is that the government mobilized everything in their power to save Wall Street bankers and UAW members, while leaving the rest of the economy to rot.
Originally, they tried spinning TARP by saying, "without it, lending to small business would have dried up."
Trouble is, WITH it, lending to small business dried up.
Other actions taken primarily by the Fed have meant that banks are able to reap record profits without doing any actual banking. They borrow money from the Fed at essentially 0% and invest it in t-bills paying 2 or 3%. They're getting rich just by taking money from the federal government and lending it back to the federal government.
What does this mean?
First, it means they don't need your deposits. That's why they pay virtually no interest on deposits anymore. Why pay interest to a depositor when the government gives you money for free? This is also why they're abandoning free checking programs. Why provide free checking if you're not trying to attract depositors?
Second, it means they don't need to lend money to anybody. Why lend to a borrower, and go through all that work to determine credit-worthiness, when you can make gobs of money lending to the federal government who can just print money whenever it needs to?
So, what to do? Yes, the TARP and the stimulus bills probably helped things. Trouble is, the way they were done meant that the government was choosing winners and losers. Very, very few winners, and lots and lots of losers.
The losers just showed how much they liked this at the ballot box.
Right now, unfortunately, I just don't see any constructive answers moving forward. The House and Senate are divided, so the odds of doing anything important are next to nil.
All I can do is look back on the idiocy of our president who, while staring at the abyss of what is essentially a second great depression, decided to bail out bankers and auto workers, but let the rest of the economy fend for itself. Meanwhile, he went off on a snipe hunt to implement the most incomprehensibly silly and useless health care bill imagineable.
So, the Democrats deserved the drubbing they got. The Republicans didn't deserve the gains they got. The president continues to be a weak and ineffective leader.
In the mean time, folks are losing their homes and businesses. For the most part, I think the business cycle will be left to its own devices to recover. I fear that we're looking at a lost decade, like Japan's. The scary part is, Japan's lost decade is more like 2 decades in a row.
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