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The Terminator Cries Uncle

by : Daveparts
Monday October 6, 2008 - 12:44

The Terminator Cries Uncle By David Glenn Cox

Yes, Governor Arnold cries for his Uncle to save him! He warns Treasury Secretary Paulson in his best Austrian accent, "You must help us, ve are close to running out of cash to fund day-to-day government operations and we are unable to access routine, short-term loans.”

A year ago the pundits and experts assured us that it was the subprime market mess that was causing the stock market disruption. They predicted losses as great as 200 billion dollars, then 500 billion, then six. Then it became the mortgage market as a whole that was in trouble with losses of 200 billion, then 500 billion, then six. Then came the White House bailout package costing 700 billion, then a trillion, then a trillion five. Stubborn Republicans took a page from Mary Poppins and refused to take their medicine without a spoonful of sugar.

Meanwhile, back at the paper ranch stocks pared off an additional trillion two in value. Profits destined to pay for retirements and the declining years of seniors were instead used to put on a foot-stomping party by House Republicans. But now the terminator is crying Uncle, Uncle Sam, you must save us! Were it not so serious there might be a temptation to say, “Wait a damn minute here! You’re the big, brave, Republican action figure here! You don’t believe in government bailouts!! Remember? It was your former governor who used to say with sarcastic glee, ’I’m here from the government to help you!’” Perhaps there would be poetic justice in telling the terminator to just let the free markets work!

We can’t do that but we can ask him why when his state budget crisis came to a boiling point his solution was to cut employees and cut wages rather than raise taxes on luxury yachts and second and third homes. Maybe he should ask them for the seven billion? We can’t do that, of course, these are our fellow Americans and they are in trouble and smart enough to be first in line. In our daily lexicon we use the term ’failed state’ all the time. We call states with tinhorn dictators or any puny little leaders who won’t do as we tell them failed states. California is today a failed state. What sort of dollar figure can you put on that?

It is beyond reckoning; how many stars are in the sky? How many grains of sand on the beach? Perhaps this was what the treasury secretary was trying to warn the Congress about. 90210 is OU812 as the governor warns about massive cutbacks in government services. My father used to explain that it was hard to get arrested during the depression. “You had to do something big because they didn’t want to feed you. They’d roust you out of a barn and run you out of the county with a warning, don’t come back. They might even hold you overnight and let you go at dawn before breakfast."

They didn’t have the manpower due to massive budget cuts. I would recommend the film “Angels with Dirty Faces” wherein the Dead End Kids didn’t go to school and there wasn’t any money for truant officers to chase them down. Rocky gives them five bucks to buy them all lunch and the kids return with enough food for a feast. He asks for his change and they give him back $4.50. “Where’s the rest of it?”

“We had to buy something, Rocky!” they explain.

Unemployment figures are the highest in five years with 159,000 jobs lost last month, but that figure exempts the 150,000 new workers entering the economy each month. So it’s actually 309,000 and if you include discouraged workers and those working part time and under the table, maybe 500,000? But Congress left town before voting on extending unemployment benefits. Why not, they’d stayed late bailing out Wall Street.

Last month the biggest financial story was Jefferson County Alabama’s (Birmingham) possible default on municipal bonds, but that’s all loose change under the couch cushion now when compared to the entire state of California failing. Suppose you were a central banker in China; what would you think about that? How would that affect your judgement to keep lending the United States more money? The problem now, world wide, is banks refusing to lend to each other out of a fear that they might default. When does the scale for the credit of the United States tip past that balance point?

CNBC, the last bastion of Republican optimism, played the theme from "Annie" on Friday. It was odd, perverse, and reminded me for all the world of radio Warsaw playing the Polish national anthem over and over until silenced by Nazi troops in 1939. It was a capitulation, a surrendering of the flag.

The sun’ll come out Tomorrow Bet your bottom dollar That tomorrow There’ll be sun!

Just thinkin’ about Tomorrow Clears away the cobwebs, And the sorrow ’Til there’s none!

How’s that for optimism? Their loss is our pain. I would have chosen a different tune, maybe not as upbeat but more to the point.

This is the End Beautiful friend This is the end My only friend, the end

Of our elaborate plans, the end Of everything that stands, the end No safety or surprise, the end I’ll never look into your eyes. . . the end

Can you picture what will be So limitless and free Desperately in need…of some…stranger’s hand In a… desperate land

Right behind California is New York, New Jersey, Maryland, Massachusetts, and New Mexico, just for starters. Then lower down the food chain are the county governments, then city governments. Abandoned and foreclosed properties don’t pay property taxes; people with no money to shop don’t pay sales taxes. The rising cost of fuel has put a heavy burden on all levels of government. A rising cost to borrow will only make the snowball bigger still, as it rolls downhill.

“The killer awoke before dawn, he put his boots on He took a face from the ancient gallery And he walked on down the hall.”



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