In his first two weeks in office, Barack Obama has done (at least) two things that George Bush couldn’t find the time for in 8 years (for the record, we are not counting listening to Earth, Wind, and Fire).

1) When he screwed something up, he apologized.

2) Exercised common sense.

Funny how admitting wrong doing and subsequently taking the appropriate steps to stay the change course, and using common sense are not mutually exclusive. Personally, I think Daschle would have made a great HHS Secretary, but I suppose appointing someone to a salaried position in the presidential cabinet who owes the IRS a couple hundred thousand in back taxes is a teensy bit hypocritical.

And what a week it was for the almighty dollar.

First, Lehman Brothers, an investment giant that managed to brave the Great Depression, threw in the towel when it announced that it would file for bankruptcy and liquidate its assets. On the same day, fellow Wall Street powerhouse Merrill Lynch, about to go belly up, agreed to sell itself to Bank of America. Insurance giant A.I.G., teetering on the edge of bankruptcy, was bailed out by the feds for a tune of roughly 85 billion simoleons. And with a $700 billion bailout of financial firms on the horizon, Goldman Sachs and Morgan Stanley–the Biggie and Tupac of the investment banking world–agreed to play second fiddle to the government intervention that they have lobbied against for as long as they have been in business.

There are lots of reasons and million opinions on what exactly went wrong on Wall Street, but in essence (and I simplify) the “best financial minds” of our time fucked up.

They fucked up HUGE.

They got greedy. They loaned money to people who they should have known couldn’t pay it back. They invested in markets they shouldn’t have. They were stupid. They were greedy. They fucked up. Have you ever heard the expression, “If this place were a business, we’d be bankrupt?” Well, these were businesses, and they are bankrupt.

But, neither of the Lehman Brothers tossed themselves out a window and onto the Wall Street pavement. Why?

Because the federal government is bailing them out. The same uber rich executives who have railed against big government and higher taxes on the wealthy got their asses saved by the government who just handed them a whole lot of tax revenue.

These are the people who fell in love with “trickle down economics.” (You might know it as “supply side” or “Reagonomics.”) This is the idea that by cutting taxes and regulations for the wealthy (i.e. A.I.G. and Merril execs) they will soundly spend and invest their excess income and the higher demand for goods and services will “trickle down” to the lower classes, who will be paid to fill these needs. This would provide more expendable income for the lower classes, allowing them spend more, perpetuating the cycle and growing the economy for everyone.

What actually wound up happening was the lack of regulations allowed a bunch of rich dudes to invest irresponsibly and throw the market into a tailspin. Every middle class household with a modestly sized investment portfolio signed on to E-trade this week and realized that Timmy and Tina’s college fund just dried up, but their tax dollars are going to bail out the very people who just fucked them.

This is called “flood up economics.” Or, as I’ve been calling it lately, “there goes everyone’s student loans and Medicare economics.”

Is it better to bail out these Wall Street institutions than to let them fail? Yes. Letting them fail completely would be catastrophic. But, the next time someone tells you that just because they have a lot of money they know what to do with it, tell them it’s just like Biggie said:

“Mo’ money, mo’ problems.”

A.I.G. Execs

Source: http://www.nytimes.com/