Article: Pop Rocks and Coke?

During my youth, a commonly told urban legend was that Mikey, the little kid
from the Life cereal commercials, died when he consumed a combination of Coca-Cola and Pop Rocks
candy which caused his stomach to explode. In September of 2008, Treasury
Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke confronted
President Bush with what may be a similar urban legend. Their story was
essentially the same, Wall Street's biggest financial institutes had consumed to
much Coke and Pop Rocks, and as a result, the entire economy was going to
explode. Paulson and Bernanke claimed that if Wall Street did not immediately
receive access to nearly $24
trillion dollars in government funds , an amount one and a half times larger
than our entire national economy, that our entire nation was going automatically
spiral into a financial crisis similar to the Great Depression. This narrative
was immediately accepted on a bipartisan basis in Washington and by the national
media. As a result, the nation was told it had absolutely no choice but to
rescue the banks, with President Bush launching the largest socialist initiative
in human history by declaring, "I've abandoned free market principles to save
the free market system".
However, in the three and a half years
since Wall Street's glorified gambling parlors became the biggest welfare
recipients in our nation's history I still have yet to come across anyone who
has made a detailed case as to why the bailouts were necessary and if the banks
weren't rescued how was that certain to bring down main street? The picture that
was painted of Depression-style runs on failing banks was a complete myth. The
bank accounts of everyday Americans were already protected through the FDIC. If
you had an insurance policy through an imperiled company like AIG, that was
backed-up through state level insurance subsidiaries, so no one ran the risk of
losing coverage. Even most pensions, that may have had some market exposure,
would have been secure through federal insurance programs. Even if the country's
big banks seized up, businesses with good credit and collateral would have been
able to secure loans through community banks and credit unions, that would not
have been engaged it the risk taking that was an epidemic on Wall Street. Even
diversified companies like General Electric, whose irresponsible finance
division threatened the entire company's viability, would have continued their
manufacturing operations, either keeping them to ensure survival or selling them
to more responsible manufacturers in order to cover their losses.
The
notion that the need to bail out Wall Street could possibly be more myth than
meat was firmly on my mind when I went to see former Senator Byron Dorgan speak
in New York City last week. The North Dakota lawmaker foresaw the dangers of
derivatives trading back in
1995 and he predicted the result of financial deregulation back in 1999. While most
of Senator Dorgan's comments focused on energy policy (North Dakota is now the
largest oil-producing state in the continental U.S.), I was able to ask him if a
complete collapse of the American economy was a certainty had Wall Street not
been bailed out. Senator Dorgan told me that although Paulson and Bernanke
claimed that the entire economy would definitely head off a cliff without a Wall
Street bailout there was actually no way for them to really know. Basically, our
government allocated trillions of our dollars to bailout a bunch of
multimillionaires who had lost a bunch of really stupid bets, and it was done on
little more than a hunch. That and a three-page
letter.
Absent a detailed description with specific reasons there
is little reason to believe that a Wall Street bailout was truly necessary.
September of 2008 may come to mark the moment that the United States went from
being something resembling a democracy to becoming little more than a third
world oligarchy, where the politically connected play a perpetual game of
"heads, I win - tails, you lose" and the rest of us just have to bend over and
take it. Until the American people realize that the mainstream of both the
Republican and Democratic parties and the corporate media are in the business of
advancing the status quo, rather than fulfilling their responsibility to guard
against such abuses, the looting of this nation will continue. By allowing the
media and our politicians to divide us by race, religion, or gender, we become
accomplices in the theft of our future and when we are told the next urban
legend, whether it be about Iran, Social Security, or something else, we will
once again find ourselves playing the fool.

And in case anyone was
wondering, Mountain
Dew
will not be covered by Obamacare.