The Reality-Based Community

(6 pm. – promoted by ek hornbeck)

Remember back in 2004 when Ron Suskind wrote about this conversation with a White House staffer?

The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” I nodded and murmured something about enlightenment principles and empiricism. He cut me off. “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — judiciously, as you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”

I know there have been parallels drawn between the push to pass this Paulson bailout and the same kind of fear-mongering that brought us the Patriot Act and the invasion of Iraq. And I think those comparisons are spot on.

But I also think that in focusing completely on the absurdity of the bailout plan, we are once again letting folks like Bush (and this time Paulson) be the ones to create reality. All of our energies are going into stopping what they’re trying to do – which is important. But how much are we balancing that with an attempt to understand what is happening in our economy right now? Are we creating a narrative that can help people understand what is going on? And finally, are we crafting solutions that can at least minimize the pain and suffering that real people are going to feel as a result of the mess we’re in?

The way I see it, the bailout is not THE problem. It is Bushco’s proposed solution to THE problem, which is that our economy is in the midst of falling apart.

I’ve been struggling with understanding just what it is we’re facing. In a comment to his essay, Jay Elias gives us at least a numerical gauge that comes from US News. Doing nothing could mean that our economy takes a hit of something like $15-30 trillion over four years. I really have no idea how much that is. But just for comparison, the annual GDP of the US in 2007 was just under $14 trillion. That’s not something that “just the rich” would feel. It means that just about every sector of our economy would break down – no one would be left untouched.

Perhaps that’s all fear-mongering and would never happen. If you think so, please let me know in the comments. That’s a conversation I’d like to have. Because if the scenario being described has any merit, just railing about Paulson’s bailout does not lead us any closer to a reality-based look at what is going on.


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  1. The way I see it, the bailout is not THE problem. It is Bushco’s proposed solution to THE problem, which is that our economy is in the midst of falling apart.

    …strikes me as dead on.  

    I think we’re going to take that hit no matter what.  I have no answers.  I have flower pix.  Really.

    But I think this is the right discussion.

  2. … in getting to form a real picture of what is going on is that the Paulson plan was offered as a done deal.  No matter what the Congress and Senate do to modify it, the blueprint is still Paulson’s.

    I’d like to see them scrap it entirely and propose a completely new plan.  Yeah, I know, unlikely.

    But I think this has been the problem for so long — playing defense against someone else’s plan.

    Great essay.

  3. …but I pretty much think, as I mentioned, that this is pretty much a done deal.  I even think that done properly, it might work out pretty well.  Despite what many people say, these derivatives are not going to be worthless.  People are still paying their mortgages; over half of even subprime borrowers are still paying.  Further, in my opinion, it isn’t a deadweight loss like when a bank goes belly up.  We’re buying something with this money, even if it is nothing more than a bit more time to make the landing from this radical economic change softer.

    It is a bad plan, nonetheless; bad in its fundamentals, avoidable if the right people in government had taken the right action years or even months ago, and certainly a lot cheaper if it had been undertaken weeks ago.  But the stakes are very, very high. Indeed, one thing we really need is some transparency; we don’t have any way of knowing even how high they are.

    But there is no stopping some form of a bailout from happening.  The question is entirely about what form it should take.

  4. Step 1. Plan to merge governments of Mexico,Canada and the US in total secret for eight years.

    Step 2. Create engineered financial collapse into 1929 type depression

    Step 3. Propose newly created North American Union using Amero as new currency.  Bankers skim 1/4 of your lifestyle off the top.

  5. If they fail, nationalize their butts and give any proceeds to the American people in the form of a national stock dividend…

    • Edger on September 23, 2008 at 02:23

    No ashes?

    No Phoenix.

    These companies have to be allowed to fold. To be able to deal with the problems that folding is causing realistically.

    • Edger on September 23, 2008 at 04:16

    Sept. 22 (Bloomberg) — House Democrats said they narrowed their differences with the Bush administration over a proposed $700 billion government rescue of financial markets even as Republican Senator Richard Shelby denounced the plan.

    Treasury Secretary Henry Paulson and Democrats have agreed that the rescue program, once passed by Congress, can begin while lawmakers create an oversight structure, House Financial Services Committee Chairman Barney Frank said. Negotiations continue over new aid for homeowners trying to avoid foreclosure, he said.

    Frank tonight withdrew his earlier assertion that Paulson had agreed that the U.S. will get equity in companies that receive government aid.

    “I overstated” the level of agreement on equity, Frank said. Still, he said, “we’ve gotten closer to where we think it ought to be.”

    • pfiore8 on September 23, 2008 at 09:11

    because reality-based doesn’t seem to work in America. and, in fact, what has been allowed to happen is absurd. this has all been absurdity-based in fact powered by more and better liars and lies.

    But if we want reality-based, then is this meltdown part of some staged coup? That needs to be addressed here. We can’t be seriously talking about how to move forward if, in truth, this is happening. It changes the discussion a bit, don’t you think?

    If reality informs us that this incompetence, then how, in reality and any serious discussion, do we count on the incompetents in Washington to solve the problems they created?

    I mean their bias on markets will inform their so called solutions. I’m not sure that’s the kind of problem-solving I want this financial market meltdown subjected to.

    I think the question is: What exactly is happening? And how do we activate our fellow citizens to start elbow their way into this mess and demand not only ACCOUNTABILITY but competence.

    Anybody can throw money at problem. That’s not going to fix this, imo. Confidence is the basis for any plan going forward. And I want to know how any bail out works. Where the money goes. Again. Does it stabilize the middle class retirement funds? Does it back state investments? Who. What. I can’t find anything clear about why this bailout or any bailout helps the middle class. I just see Wall Street slumping because there is a stall. And I hear Bush braying about how urgent this is. I heard that before. Iraq. Remember?

    Who owes who what? As complex as it is, this is about numbers. And they always should add up. I think we are entitled to understand this process and to make sure that nobody profits from any proposed bail out, when it’s all about stabilizing markets. And of course, the Sec’tary of the Treasury shouldn’t be more powerful than the President.

    • robodd on September 23, 2008 at 09:20

    Game over.

    • kj on September 23, 2008 at 15:04


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