It seems to have taken forever. Let’s hold back on our cheering for now, though, as only time will tell if what happens next is any better….

If you follow my delicious bookmarks at all, you will have noticed that I’ve developed a bit of a macabre fascination with articles about the events that have come to be known as America’s Current Financial Crisis. Here’s the full list of those that I’ve considered significant for one reason or another over the past few days. They’re in no order, at this point, as I’m in a bit of an “information gathering” phase, reading through all these articles repeatedly to try and tease out the unifying threads.

I’ve quoted what I thought was a critical or key point in each article, though I change my mind as all this churns around in my head. As a teaser, you might pay particular attention to the articles from Open Secrets — that is, The Center for Responsive Politics — which will figure prominently in what I have to say. Open Secrets provides a look at the intersection of economics and politics that, as far as I know, is unlike any you’ll find anywhere else on the web.

• Bloomberg.com: Worldwide – “The market storm that brought down Lehman Brothers Holdings Inc., American International Group Inc. and other pillars of U.S. finance may have also blown holes in the portfolios of House Speaker Nancy Pelosi, Senator John Kerry and more than 50 other members of Congress…. Altogether, 56 senators and representatives had stakes in AIG, Lehman, Fannie Mae, Freddie Mac, Bear Stearns Cos. or IndyMac Bancorp Inc. — some of the biggest casualties of the market bloodbath — according to the Center for Responsive Politics….”
• Abroad, Bailout Is Seen as a Free Market Detour – NYTimes.com – “Is the United States no longer the global beacon of unfettered, free-market capitalism? In extending a last-minute $85 billion lifeline to American International Group, the troubled insurer, Washington has not only turned away from decades of rhetoric about the virtues of the free market and the dangers of government intervention, but it has also probably undercut future American efforts to promote such policies abroad…. ‘I fear the government has passed the point of no return,’ said Ron Chernow, a leading American financial historian. ‘We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in it’s wildest dreams.’”
• Organic Market – Forbes.com – “The consensus is that Something Must Be Done to rein in financial markets. This consensus is part of a general theme among some pundits and economists that it’s time to give up the naïve faith that markets can solve every problem. We are told that markets have failed…. Yet much of the current chaos is the result of attempts to steer or control markets rather than let them be. Much of the chaos is the result of political failure.”
• Free Market To The Rescue – Forbes.com – “Although market ideas are today taking something of a beating, nothing like the 1930s fervor for central planning is in the air. For this reason alone, I am optimistic that we are not on the verge of a second Great Depression….. But in this optimistic account there’s a warning. If our confidence in free markets does come to be overwhelmed by a renewed, if utterly baseless, confidence in the central direction of the economy, then our economic prospects will once again truly be in a great depression.”
• Optimism Quickly Fading – “To ban short-selling of stocks is to short-circuit an important mechanism through which people share their knowledge and expectations with others. Banning a mechanism that better allows share prices to reflect the expectation that the underlying assets are not worth as much as current market prices suggest does nothing to change the underlying reality. Such a ban merely distorts knowledge of this reality.”
• SEC bans short-selling – Yahoo! News – “The Securities and Exchange Commission took the dramatic step early Friday of temporarily banning the routine practice of betting against company stocks…. The move, announced on the agency’s Web site, may well be unprecedented and a reflection of regulators’ concern about the widening scope of the financial crisis as entreaties come from all quarters to stem a swarm of short-selling.”
• Vast Bailout by U.S. Proposed in Bid to Stem Financial Crisis – NYTimes.com – “The head of the Treasury and the Federal Reserve began discussions on Thursday with Congressional leaders on what could become the biggest bailout in United States history….”
• Regulating away improvement – “The bailouts are getting bigger. The rescue of US mortgage giants Freddie-Mac and Fannie-Mae is hailed as the largest bailout in history. On our side of the Atlantic we saw the similar, but smaller, rescue of Northern Rock. All of these have common features. The companies concerned were nationalized, and their losses are now underwritten by taxpayers. Between them their rescues have engendered a culture of bailout,which says that the public has to be protected at all costs from the consequences of failure. It is almost as if there has been a collective loss of faith in capitalism and in its ability to take failures in its stride.”
• The Austrian Economists: Who Can Fix This? – “Government is NOT a corrective. More often than not, it is the source (as in this case) of our economic difficulties. No bailouts, eliminate regulations, certainly no nationalizations, no priming of the pump with easy money, just allow firms to be weeded out that made imprudent decisions, allow capital to be reallocated, and permit prices to adjust to the new market realities.”
• Economic View – Too Few Regulations? No, Just Ineffective Ones – NYTimes.com – “There is a misconception that President Bush’s years in office have been characterized by a hands-off approach to regulation. In large part, this myth stems from the rhetoric of the president and his appointees, who have emphasized the costly burdens that regulation places on business…. But the reality has been very different: continuing heavy regulation, with a growing loss of accountability and effectiveness. That’s dysfunctional governance, not laissez-faire…. In the meantime, if you hear a call for more regulation, without a clear explanation of why regulation failed in the past, beware. The odds are that we’ll get additional regulation but with even less accountability and even less focus on solving our very real economic problems.”
• OpenSecrets | Fannie Mae and Freddie Mac Bailed Out After Buying In – Capital Eye – “As economists and analysts try to sort out how giant mortgage buyers Fannie Mae and Freddie Mac ended up needing to be bailed out by the federal government this past weekend, here at CRP we can see part of the picture of why that solution won out over others. Both Fannie Mae and Freddie Mac are prolific political players, pouring millions of dollars into campaign contributions and lobbying, efforts that have resulted in keeping the two companies afloat as more Americans have defaulted on their mortgages.”
• Commentary: How to prevent the next Wall Street crisis – CNN.com – The author writes about several causes of the current U.S. financial crisis, concluding with: “The coup d’grace was the Iraq War, which contributed to soaring oil prices. Money that used to be spent on American goods now got diverted abroad. The Fed took seriously its responsibility to keep the economy going…. It did this by replacing the tech bubble with a new bubble, a housing bubble. Household savings plummeted to zero, to the lowest level since the Great Depression. It managed to sustain the economy, but the way it did it was shortsighted: America was living on borrowed money and borrowed time.”
• How Paulson Would Save Fannie Mae – WSJ.com – “Recent statements by Barney Frank (D., Mass.), the chairman of the House Financial Services Committee, and Chuck Schumer (D., N.Y.), a powerful member of the Senate Banking Committee, make clear that Congress will never let them be privatized, broken up, slimmed down, nationalized or any of the other options hopeful reformers are putting forth today. Fannie and Freddie in their current form are just what Congress wants: an inexhaustible source of campaign contributions and funds for favored groups.”
• OpenSecrets | Wall Street Shake-up Connects to Washington Through Contributions, Personal Investments – Capital Eye – “Wall Street’s grim news has plenty of people worried about their pocketbooks. Lawmakers are among them, not only concerned with how to boost the economy but with their own personal finances tied to companies that are struggling. The richest members of Congress seem to be the most invested in the companies at the center of the Wall Street shake-up…. Of all of the companies facing major transitions, lawmakers owned the most stock in American International Group (AIG), the nation’s largest insurer, which has asked the Federal Reserve for emergency funding as it faces financial hardships. Twenty-seven lawmakers owned stock in AIG last year, worth between $6.4 million and $20 million…..”

I’ll have more on all this shortly, with a longish-post (more like a small book) where I try to make some sense out of what I’ve read in these articles. Until then, as a thought for today, listen to the lyrics of this 1986 performance of “Is This the World We Created,” by Freddie Mercury and Queen.

• Is this the world we created?
  We made it on or own.
  Is this the world we devastated
  Right to the bone.
  If there’s a god up in the sky
  Looking down
  What must he think of what we’ve done
  To all that he created….

… the death of Tim Russert, one of the few political analysts and observers who publicly demonstrated authentic passion for his work and for the American political system, and from whom we could all learn something about the arts of communication, rhetoric, and conversational negotiation.

… and from Senator Joseph Lieberman, an observation about Russert that, to me, is one of the highest compliments one human being can pay another:

" … the truth is he made us all better…."

Every now and then, I puzzle over the idea of converting this blog to a political blog, but so far have kept that idea in my back pocket. To effectively comment on politics — the way I would want to do it — I would have to devote some large chunk of nearly every day to keeping up with political news and commentary all over the web, at the very least, and certainly couldn’t ignore other forms of media. I also doubt that I would be content with a politics-as-current-events approach, and would want to explore the historical (or broader social and cultural) context for just about everything political. So, while this may be something I’ll try to take on in that hazy future when I have more time (??), for now the back pocket will stay mostly zipped shut.

Still, the story about Ron Paul raising 4.2 million dollars for his presidential bid in one day — a historical fundraising record — has definitely got my attention. I honestly don’t know that much about Paul, though I understand he’s favored in libertarian circles, and have noticed how much the media outlets seem to choke when they try to describe him. That’s probably as telling as anything else. And I do think it was clever of Paul to associate his fundraising extravaganza with Guy Fawkes Day, and, intentionally or not, with the film V for Vendetta. Given what appear to be his ideas, and the attempt of his candidacy to represent a challenge to the existing (and entrenched) political establishment, the metaphors all hang together quite nicely.

The Cato Institute released a statement suggesting that Paul’s success was “a clear sign that there is a yearning by the Republican grassroots for the party to return to its historic small government roots.” This is probably true, though it’s likely as much wishful thinking as anything else. I would say, however, that there is a tendency for American citizens to swing away from obviously abusive power structures, and this (like the recent shifts in congressional power from Republican to Democrat) may be evidence of that happening. There is of course a mountain of writing I could spit out on this subject alone, if this was a political blog … which it ain’t. Right? Right. In any case, such shifts are not guaranteed, do not necessarily last, and typically do not happen fast enough or with enough depth … but we’ll see.

There is a particularly good (and typically good, I should add) analysis of The Ron Paul Phenomenon from Glenn Greenwald. Every time I look at it, there is another handful of new comments — 484 when I started writing this, and 492 right now. If you read no other article about what has happened, do take the time to read that one.

I will probably come back to this, though I’m not sure when. I haven’t had much luck keeping up with this blog with my classes going on; it turns out that it’s a little tougher to add “blog” to the work/life/school paradigm than I had expected. But it’s all about learning how to get things done, so for this term, maybe, I’ll just observe what does and doesn’t work and have better luck next term. Despite my absence, I’ve had some fairly regular traffic, so thanks very much to all who’ve stopped by. I can’t even express how much I appreciate it.