“Our entire economy is in danger.”
Whether the threat to the economy is as it was portrayed with unprecedented grimness by President George W. Bush last night, or whether it is another version of the mushroom cloud scare that was used to force agreement over the ill-fated invasion of Iraq, American law makers will have to decide.
What adds to the trouble, if the economy now stands on the precipice of disaster, is that precisely the same policy makers, regulators and financial actors who allowed the crisis to reach this point now claim to have the answers. And Wall Street, which was central to the creation of the subprime problem, will now be key to its resolution, or so it is asserted. Skepticism is an appropriate litmus test for discovering reality.
Few -even its earliest critics- expected the war in Iraq to be so costly in lives and treasure. Are the seeds of similar folly being sewn in the staggering $700 billion bailout plan? Will the greed, shortsightedness and shortcomings in governance and oversight that are the hallmarks of this disaster also infect the plan for economic survival? And what will be done to ensure they do not?
On the correct answers the fate of countless millions depends.