Steel-Gray Monday

Thanks to the New York Times' online news updates, I found out: the Dow opened today down 300, and closed down 500; some investment bank I hadn't heard of until now (Lehman Brothers) is screwed in the same way Bear Stearns was, minus the bailout from the Fed; and Merrill Lynch, crippled and failing, sold itself to Bank of America.

Also, I am still unemployed.

Apparently all this Wall Street tomfoolery has to do with real estate. And by "real estate," I mean the fact that a while ago someone decided it would be a good idea to let high-risk creditors take out mortgages with only 10% down payments, broke those mortgages into little pieces, and then sold them to said investment banks with absolutely no regard for the inevitable: that these bad creditors would eventually be unable to make their payments, realize that their house hadn't "appreciated" like they would have liked, and that measly 10% down they paid isn't anywhere near enough to keep them out of the red. Cue the foreclosures, cue the frantic banks and plummeting stock exchange.

Now, I don't have a mortgage. I don't invest what little savings I have. Like I mentioned, I didn't even know who the Lehman Brothers were until today, and yet, that mysterious, omnipotent force, "the Market" affects me every day. So, I can conjecture that no matter what I, personally, do, the Market can screw me.

This wouldn't bother me so much if the same people who love talking about "the market" so damn much weren't also the same people who love to preach about "personal responsibility." I am personally responsible. I pay my bills and my taxes, I pick up litter (both my own and others'), I stop for pedestrians. All of that. And what does all that personal responsibility get me? Evidently a stay at my parents' place and few prospects.

I say it's high time we stop focusing on personal responsibility and start in on corporate responsibility. There's no reason the educated, financially savvy people involved in this whole real estate/bank/Dow backslide were not capable of foreseeing this possibility. Maybe they didn't, but that doesn't mean they aren't capable. The problem lies in the fact that it (apparently) is no one's job to foresee things. Oh, if only there were some sort of organization--separate from the corporations it oversees, yet still working in their best interest--that could keep an eye on them, predict possible issues, and have the power to put their foot down when said corporations come up with a hairbrained idea that might ruin the economy.

What's that? There is such an organization? And it already has the power to do these things, if it so chooses? That's right, how foolish of me, the government can do all this! In the form of regulation!

But again, the same people who constantly claim that "the market" will fix not only itself, but everything from worldwide hunger to my hangnail, are the ones who have historically been anti-regulation. Love of the free market and fiscal conservatism are perfectly legitimate positions to have, if that's your thing, but when you combine an essentially unregulated market with shortsighted get-rich-quick schemes (such as the real estate shenanigans described above) that end up biting the entire U.S. economy in the ass, it's pretty easy to start thinking that what's behind all this is not some economic philosophy or laissez-faire attitude, but rather pure, unadulterated greed.

Because let's be honest, here. The chances that the CEOs of these banks are going to be destitute as a result of their poor decision making are approximately zero. We see this all the time: a big company goes down, all its employees are let go sans pensions and severance pay, yet the top executives somehow escape with millions in "bonuses."

I'm not saying Person X should be punished to the point of homelessness for being shortsighted or wanting to turn a profit. I realize that in a situation like this, sometimes there is no one Person X to blame; culpability in these cases is spread around like frosting on a big ass cake. However, the fact remains that the economy's misfortune is someone else's gain. People made money on these deals, a lot of money. They may lose it in the stock market (which would be poetic justice), but they probably won't. They may be in their private jet right now, on the way to the Cayman Islands--all while the rest of us "normies" struggle. And that's not right.

So part of me was glad that the Fed decided not to bail out Lehman the way they did Bear Stearns. "Deserved, punks!" I thought gleefully. But their demise may not be theirs alone, as that moody little tramp, the Dow, proves. According to Paul Krugman's op-ed in the Times today, if Lehman bleeds too hard and too fast, it could take down a lot of other banks with it. Well, isn't that wonderful.

It's high time the companies that screw everything up were held accountable. Even better would be if they were hindered from screwing everything up in the first place. I agree with Paulie: "if institutions need to be rescued like banks, they should be regulated like banks."

So if anyone in power is reading this, I'd like to put in my vote for some sensible regulation, please. Also, if you have any job openings, I'm ready to start immediately.