Wednesday, June 12, 2013

What really happened to Mrs. O'Leary's cow?

 
 


"One dark night, when people were in bed,
Mrs. O' Leary lit a lantern in her shed,
The cow kicked it over, winked its eye, and said,
There'll be a hot time in the old town tonight"
 

Well, it is over. The smart wizards of MSNBC have once again told the masses the economy is now healed. In fact, it is healed enough for our historic interest rates to start ticking up again. However, the "financier" who is a frequent guest on MSNBC, could not resist taking one more shot at poor old G.W. Bush. "Even though his approval ratings are now almost 50%, it is only because the American people like former presidents. They forget how he made a mess of the economy". Yes, President Bush has become the modern day version of Mrs. O'Leary's cow.

For those who do not remember, the great Chicago fire started on October 8, 1871. It was a Sunday night, and history has shown it did indeed start at the O'Leary farm. Somehow, poor old "Betsy" the family cow, got the blame for kicking over a lantern and starting the blaze. However, many historians believe this is more urban legend than history. It probably started from a stray ember coming from someone's fireplace. In any event, true cause of the fire will never be known.

The financial meltdown of 2008 started on President Bush's "farm" - that is, on his watch. That is the biggest amount of blame he can take for what followed. As reported earlier, the financial fire really started during the Clinton Administration. As a good Democrat, he felt compelled to do something, during the crazy, affluent days of the 90's, to get more poor people into homes. Barney Frank (D-MA) agreed with him. Between Frank and Chris Dodd, the spark turned into a flame. Using their positions on financial committees in the House and Senate, they "strong armed" banks into accepting mortgage loans that (once defaulted), became "toxic".

Fannie and Freddie became involved in the bundling, de-bundling, trading and selling of these mortgages gone bad. We all know the rest of the story - soon the banks started to break under the weight of worthless mortgage paper. The crash came, and Messrs. Frank and Dodd rode out of town Scott free. Who became Mrs. O'Leary's cow? Two people actually. First it was President Bush for being in charge at the time, and second it was John McCain who was guilty of being the Presidential candidate from the same party as President Bush.

Enough about history - lets talk about the future. As said earlier, many economists now believe the worst is over as interest rates are beginning to "normal up". However, out from the cracks comes Chicken Little. What is Mr. Little saying? "OMG- with our HUGE debt to service, higher interest rates will bankrupt the nation!" Really. If that does happen, who will be the next cow to blame.

 

 
 

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