The market is up! The market is down! The speculators are losing money! Government better do something quick!
Interestingly, among the loudest voices calling for the Federal Reserve to take quick action were the same voices who call for smaller government and for government to “get out of the way of business” — a little odd, don’t you think?
Some financial columnists reassure us that the basic economy is healthy, there’s nothing to worry about, don’t panic. Others say there are indeed problems in the subprime mortgage lending game, but it should be fairly easy to “contain” those problems after a short “market correction.” A few, more sober than the others, note that there are underlying problems in the entire mortgage industry and in the number of unsold homes accumulating on the market. (Odd, when there are so many homeless people, isn’t it?)
Well, is the problem little or big? Short-term or long-lasting? Restricted to the stock markets or something us regular folks should worry about?
One clue is what the governments of the world have been doing. Between Aug. 9 and Aug. 13, governments and central banks added billions of dollars to boost “market liquidity.”
How many billions? As of Aug. 13, European central banks had added $279 billion. The U.S. Federal Reserve had added $62 billion. The Japanese central bank had added a measly $5 billion. That’s a grand total of $346 billion! It’s kind of hard to define what a “little” problem on world financial markets amounts to, and where it slops over to become a big problem, but in my world, $346 billion is a big chunk of money.
I emptied out my coin jar and there was less than $50 in it, all those quarters, dimes, nickels and pennies that I dropped in to clear out my pockets over the last year. Fifty dollars is not a lot of money, not these days. A few hundred dollars might be a bit much for me to pony up on the spot, but in the grand scheme of things, that’s not a lot of money either. But it would take emptying a lot of coin jars and piggy banks to find $346 billion.
Even just the $62 billion added by the Federal Reserve thus far amounts to lots of money per person in the U.S.
I’m confused. If the U.S. government (of which the Federal Reserve is a part) can find $62 billion in a couple of days to make sure that finance and mortgage companies don’t go broke, why can’t they find a few billion to improve health care for kids? (Bush is threatening to veto a bill providing additional health coverage for U.S. children.) That $62 billion would be a good down payment on a national public health care system that covers everyone.
Maybe this week they can find another $62 billion somewhere in the White House and do something useful for the people of the U.S. rather than just bailing out the financial markets.
But I wouldn’t advise you to hold your breath waiting. They will only find that kind of money for human needs when millions of us demand action and force the government to do its real job.
Marc Brodine (marcbrodine @inlandnet.com) is chair of the Washington State Communist Party. He is holding onto the coins in his coin jar.