It is pointless to speculate on what will happen next—one can hardly keep up with all the Nobel-prize-winning economists offering their highly varied opinions.
On the other hand, it is pretty clear what occurred yesterday when the political class split down the middle over the Wall Street bail-out. There is a massive crisis of confidence among them equivalent to the universal distrust among the banks. Just as Morgan Stanley refuses to lend to Citibank, which refuses to lend to Barclay’s, no one among the Republicans, the Democrats, senators, congressmen, Bush Administration figures or mid-level bureaucrats trusts anyone else as far across Washington as they can throw them.
Thus the result of systematically lying and scamming for the last eight, indeed thirty years, bamboozling us with spin, cooked up intelligence, refried statistics and partisan opportunism dressed up as patriotism. They got so used to their post-modern rewrite of reality that they can't tell fact from fiction any more.
It is grimly hilarious to hear conservative Republicans admit they don’t believe the wolf story peddled by Paulson as the Democrats compare the power grab over Wall Street to the unitary executive established after 9/11 to facilitate the bogus conquest of Iraq.
We put up with Bush and now must suffer the consequences. By ‘we’ I mean both those who celebrated him and those who enabled him by refusing to resist, both John McCain and the ineffable Pelosi who suddenly gave vent to her outrage two years too late.