"Ah wah mek dem a gwan so"?

Today's post is a little "Bob Marley 101". If you are befuddled by the title, it is a famous line from a Bob Marley song. "Ah wah mek dem a gwan so" means "What is making them behave like that?"

What happened today?

To continue my song and CD analogy - the singers claimed yesterday to have a song (we even heard the leadership of both sides singing a bit of it) but they went to the recording studio this morning and couldn’t get the song recorded. Why? Because the Republicans decided that they did not like one of the voices (Nancy Pelosi). It was an expensive way to be offended. Back to my analogy: Studio time costs money, and the song - any song - has to be recorded before it can make some money. Until you get a CD recorded, you are just racking up costs. What kind of costs? $1.2 trillion in market value was lost today for a $700 billion bailout bill - the "CD" with some kind of return. Somebody adding 2+2 and getting 4 yet? Kind of expensive to not like a speech. As I read in one of today's papers - the vote is on the bill, not a speech.

What caused today’s historic unprecedented 777 point drop in the Dow?

Disappointment and lack of confidence – both sides said they would do it, and then the Republicans reneged on their promise. Again, Republicans said:”yes I will”, and then no, they didn’t. What happened to “gentleman’s agreements”? What happened to “my word is my bond”? Do the Republicans appreciate the magnitude of a problem that a lack of trust in a Government causes, especially when political representatives display a lack of trust in their own Administration? Evidently not, since they consistently destroy any credibility they have with their own people and the world.

My two cents:

Respectfully, if the leadership did not think the bill was going to pass, people should have said nothing. Markets operate on information, confidence and trust, and they felt they had been made a promise. The $1.2 trillion 777 point drop is the result of a broken promise plain and simple. It represents uncertainty. And people are afraid when they do not know what to expect.

Is this ideology again?

Now, again – the Republicans befuddle me. This is now the SECOND internal revolt in front of the whole world in real time. Is this the ideology problem again that I mentioned in an earlier post? Let's look at a few words from Bob Marley who said:

“Today they say that we are free,
Only to be chained in poverty.
Good God, I think it's illiteracy;
It's only a machine that makes money.”

Well, if the markets would sing, that’s the song they would be singing today. Republicans tell us it’s all about the “free market”, right? Well the “free market” is chained in poverty, and frankly, it is only a machine that makes money.

Why do we care about the market being in “poverty”? When the markets are poor, people become poorer.

Let me spell this out:

1) Companies operate on credit. Credit comes from the “markets”. When markets are “in poverty”, they cannot provide credit, or when they do they make the terms very expensive. This makes companies “poorer" because of the cost of debt repayment, and it makes them have to make more expensive goods and services to sell to people to be able to afford to stay in business.

2) Poorer companies paying more for necessary credit - again, from the “market” - cannot afford to employ people so people may lose their sources of income – in other words, people become “poorer”

3) Poorer companies definitely cannot raise salaries so people can have more money to meet the rising costs of living – in other words, people become “poorer”

4) People have to spend the money they have on the more expensive goods and services I mentioned above, so people save less – putting less money in “the markets”. When they do put money in the “markets” and there are all these man-made shocks – caused by the Republican Administration and their internal revolts - the people lose their money - in other words, people become “poorer”

5) Goods and services are so expensive relative to salaries that people rely on credit to survive. Credit comes from the “markets”. If there is no credit, people cannot access it. If there is expensive credit, people become “poorer” trying to repay debts.

Free markets are the centerpiece of Republican ideology. Yet, when the markets are trying to be “unchained from poverty”, Republicans claim to be anti-Wall Street and pro-people. So let’s talk about people.

Again, Bob Marley said:
“Today they say that we are free,
Only to be chained in poverty.
Good God, I think it's illiteracy;
It's only a machine that makes money.”

Yes, its the same quote as above. But Bob Marley wrote this song to illustrate the plight of people – not markets. It is the people he sang about being "free" but "chained in poverty". The last time I looked, the Constitution started "We the People", not "We the Markets". So after all these cheap political points and the clinging to ideology, in order to prevent the people from dying of poverty, the Republican Government may just have to distribute $700 Billion to the people.

And that is the biggest irony of all - it would be the very Republicans who would have created the very thing - Socialism - they caused so much havoc trying to prevent with "Free Market Capitalism" ideology.