Munchausen's Syndrome by Proxy is a strange malady indeed. In the strict sense of what it is, a person creates illness in him/herself in order to illicit attention from the medical profession. In contrast to hypochondria, Munchausen’s illnesses are real. The person actively seeks out an illness in order to get the 'benefits' of treatment.
In a more perverse form of the disorder, the person actively makes someone else sick in order to help them, or get treatment for the victim. In a number of cases, mothers make their child sick so that they can take the child to the doctor and derive social comfort from being the stoic and selfless parent of a sick child.
The psychological term stems from the fictitious Baron Von Munchausen who was a weaver of tall tales. These were tales of his grand accomplishments against incredible odds. According to Wikipedia, 'Originally, this term was used for all factitious disorders. Now, however, there is considered to be a wide range of factitious disorders, and the diagnosis of "Munchausen syndrome" is reserved for the most severe form, where the simulation of disease is the central activity of the affected person's life.' It is not the intent of this article to explain all aspects of the medical/psychological of this syndrome but to show it as an analogue for the free-market financial malady that this country and the whole world is now suffering.
Since psychiatric imbalances are never rational, one can exhibit contradicting symptoms which only serve to strengthen the claim of ailment. The financial industry knew that they were making bad loans to people who did not have the ability to repay them. The Administration knew that their financial arms, Freddie and Sallie were buying those bad loans because that is exactly what they were supposed to do. The explicit intent of those two massive mortgage institutions was to make it possible for less than qualified border-line middle-class people to buy a house and move solidly into the middle-class. These people, presumably deserving to do so, needed cash to buy all the stuff they would need in order to make good on their upwardly mobile lifestyles. They needed cash to send their children to college even as the college financing dollars were getting more scarce and students were notoriously deficient in repaying those loans. They needed cash to fund their retirements since Social Security could not keep up with the demands of the economy.
All the while that the neoconservatives were decrying the government interference in the free market, the waste of public funds on public education and the inefficient management of Social Security, excessive regulations that made US companies uncompetitive in a global market, the financial institutions were racking up huge profits for their executives and preferred investors right up to the point when the first rumblings came up from deep in the foundation of the cardhouse.
Up until the week of September 15, 2008, the industry was just not feeling well. A sort of malaise set in accompanied by non-descript symptoms. The patient had some kind of distress but nobody was paying attention to the pain it was suffering. In fact the patient was suffering indigestion from eating too rich a diet. It was bloated on easy profits from tainted Tuna! But the patient was not yet sick enough to present definitive symptoms that would require a huge transfusion of money from taxpayers to the inflamed veins of the market.
The sick children of the Administration cried out to their parents and got their attention. They were rushed to the ICU (Immediate Currency Unit) for an examination. Before the illness was diagnosed, the President, Secretary of the Treasury, and the Chairman of the Federal Reserve demanded that the doctors begin experimental treatment and save the children. They were in such dire straits that waiting even a day could spell doom for the sickly offspring. No one should question the parents’ motives, veracity or competence to suggest and lobby for the specific treatment. They demanded an unencumbered infusion of $700 Billion to resuscitate and stabilize the patients. Never mind what the final bill might be. The children were too precious to put at risk.
The neoconservative movement has sought for years to emasculate the government and turn over the power to private corporations who could 'do a better job and even make a profit.' Although this rescue (see the parallels in that too?) - the poor corporations need to be rescued like some Pauline from Snidely Whiplash - constitutes the largest intrusion of government into private businesses, the rationality of doing it is lost in the urgency of the pleas for help. Then right on cue, the nickel and dime bait and switch ploy was added. It is not just mortgage bonds that are in distress, all forms of distressed assets should be eligible for the rescue, says the industry. And what about the Lehman Brothers who flinched first and filed the bankruptcy. Maybe that patient is only in a coma and not really dead. Maybe is was just a bad dream and Bobby Ewing is not really dead. A jolt of $50B might bring that one around and Lazarus may indeed rise again. George Bush has a lot of faith, maybe if we all hold our breath and wish really hard...
Let’s put this bailout on a performance measure basis. If my 401 (k) funds recover to the balances of September of 2007, then I will call the $700B an investment. If it doesn't I will call it a huge rip-off.
A bit more if you are interested - The Urge To Surge
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