The news that the Canadian telecommunications manufacturer, Nortel, filed for bankruptcy protection thuds like another shoe dropping. The news is unrelentingly bad. As a letter writer to the New York Times put it this morning: what does it say about our current situation that the best news of the week was a plane crash?
Nortel had an august place in the dot.com boom as the 20th century wound down. At the top, Nortel's market cap accounted for one third the market value of stocks traded on the Toronto Stock Exchange.
For moments like this, I retrieved a January 2000 copy of the breathless bubble booster, "The Gilder Technology Report".
Gilder used the word "telecosm", an off-rhyme with orgasm, to describe the infinite potential available to anyone wise enough to dump hard earned money into speculation. "The computer age is over. That is the significance of the amazing Telecosmic run of the last year. Of the best stock market performers of 1999- an all time record year by everymeasure of wealth creation-- the Telecosm list led the parade. ... the date-adjusted Gilder Technology Report selection was up 268 percent, far ahead of any other major index."
"The Telecosm will make human communication universal, instantaneous, unlimited in capacity, and at the margins; free." On the bankrupcty news, Nortel, whose U.S. stock reached a split-adjusted high of almost $900, traded last week on the Toronto Stock Exchange down 69 percent to 12 cents.
Who would have thought that the dot.com bubble would have been replaced so quickly and efficiently, thanks to Federal Reserve interest rate policies and lax regulation by the Clinton and Bush White Houses, with a housing asset bubble? In 2005, on the editorial page of The Miami Herald, the former president of the Latin Builders Association Willy Bermello crowed-- without any hint of another viewpoint-- that values in real estate development were doubling every few years; "The bubble is not latex but stainless steel."
Too bad for all of us that bubbles were allowed to dominate our economic and political landscape without challenge. We are living with the consequences imposed by our own dumb passivity in the face of charlatans, hucksters, and Ponzi schemers dressed up in Chamber of Commerce values.
Today, the building industry is pleading with Congress for more bailouts, including a new allowance that would let builders write off losses against profits stretching back five years into the middle of the housing bubble. There were many, many people and civic activists who opposed the building industries, as they gobbled up farmland, wetlands, and induced fraud across the fast growing areas of the nation. It is an outrage that Congress would even consider rewarding industries and executives who blindly drove the US economy into the depths of the worst crisis since the Depression.
I want to know, where is my bailout? Or better; when am I and others going to be rewarded by Congress for fiscal prudence, careful planning to protect my family, and living within our means?
5 comments:
Haven't you realized that bailouts are not for the "common citizen"? How much did you contribute to any of the presidential, congressional or local campaigns? Compared to what corporations, lobbyists, lawfirms, and other big enterprises "pay" to those campaigns, any amount that the ordinary citizen contributes is NOTHING, therefore, the one that pays the most gets the best service from those in power.
Blogger geniusofdespair said...
Gimleteye: Maybe we should write to congress and ask for our Blog Bailout. We are hit by hard times too here in the blogosphere (is that a word). Speaking of hard times, I am disappointed at Alex Sink's decision. If the Democrats don't come up with some good choices, Pubs will rule the day.
You said: "we are living with the consequences imposed by Our Own Dumb Passivity" -- hard pill to swallow. So, back to the bail out, do we get it for at least writing about it while it was happening?
As always I repeat: Politicians are pais off both over the table and under to do what they do and unless we find a way to eliminate the crooks, they will continue to burn we the common people.
Instead of bailing out the builders, we should be asking for new laws to claw back the profits that they earned during the bubble.
Hell, they're asking for bailouts? Let's find out what their personal net worth and assets are, first. How much money did these people put in their bank accounts before the bubble blew up. Now they want more? I'm getting really really angry about this because it is not JUST bailouts they want, they want the stimulus money too. We're surrounded by crooks.
These Bail-Outs are making me angry too. It is getting out of hand. I think we should all start writing letters with our own sob stories like the developers are except they are writing theirs from their multimillion dollar mansions. One I know has a $200,000 boat slip to boot (for his million dollar yacht)!
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