Here’s a tidbit from the Wall Street Journal of September 9th about a series of weekend telephone calls by Treasury Undersecretary for International Affairs David McCormack. He rang up:
‘. . . foreign central banks and other overseas buyers of [Freddy and Fanny’s] securities or debt to reassure them of the instruments’ creditworthiness’.
Do tell! A top government honcho is spending his Saturday sweating on the phone like a homeowner staving off foreclosure. And may we ask to whom might he have been talking to shore up our nation’s finances? Pray continue:
‘Over the weekend, Treasury officials called sovereign-wealth funds in Abu Dhabi and elsewhere in the Middle East’.
So there we have it: after eight years of Bush’s reckless tax cuts, record fiscal and trade deficits, and stupidly profligate warmaking, we are now officially in hock to the Arabs because we’re broke. Paulson then pulls the plug on the quasi-governmental housing agencies and guarantees their debt with our tax money so that certain unnamed ‘foreign central banks’ don’t pull the plug on us.
In short, after decades of American-led, IMF-managed monetary dictatorship over the world’s poor and their weakened states, it is we ourselves who are now beholden to the wealthy and must obey.
‘And so the whirlygig of time brings its revenge’.—William Shakespeare