George Bush: The Unauthorized Biography - Get a Free Blog

new revenues. They also bought Bush's rosy economic forecast of higher economic
growth and lower interest rates. Senate Majority Leader Mitchell, accepting his pathetic
rubber-stamp role, commented only that "much sterner measures will be required in the
future." Since the Democrats were incapable of proposing an economic recovery program
in order to deal with the depression, they were condemned to give Bush what he wanted.
This particular swindle would come back to haunt all concerned, but not before the
spectacular budget debacle of October, 1990.
In the spring of 1990, according to an estimate by Sid Taylor of the National Taxpayers'
Union, the total potential liabilities of the US Federal government exceeded $14 thousand
billion. At that point the national debt totalled $2.8 billion, but this estimate included the
committments of the Federal Savings and Loan Insurance Corporation, the Federal
Deposit Insurance Corporation, the Pension Benefit Guarantee Corporation, and other
agencies.
Bush's inability to pull his regime together for a serious round of domestic austerity was
not appreciated by the crowd at the Bank for International Settlements in Geneva. Evelyn
Rothschild's London Economist summed up the international banking view of George's
temporizing on this score with its headline, "Bush Bumbles."
A few weeks into the new administration, it was the collapse of the FSLIC, studiously
ignored by the waning Reagan Administration, that reached critical mass. On February 6,
1989, Bush announced measures that his image-mongers billed as the most sweeping and
significant piece of financial legislation since the creation of the Federal Reserve Board
on the eve of World War I. This was the savings and loan bailout, a new orgy in the
monetization of debt and a giant step towards the consolidation of a neo-fascist corporate
state.
At the heart of Bush's policy was his refusal to acknowledge the existence of an
economic crisis of collossal proportions which had among its symptoms the gathering
collapse of the real estate market after the stock market crash of October, 1987. The
sequence of a stock market panic followed by a real estate and banking crisis closely
followed the sequence of the Great Depression of the 1930's. But Bush violently rejected
the existence of such a crisis, and was grimly determined to push on with more of the
same. This meant that federal government would simply take control of the savings
banks, the overwhelming majority of which were bankrupt or imminently bankrupt. The
savings banks would then be sold off. The depositors might get their money, but the
result would be the total debasement of the currency and a deepening depression all
around. In the process, the US federal government would become one of the main owners
of real estate, buildings, and the worthless junk bonds that had been spewed out by Bush's
friend Henry Kravis and his partner Michael Millken during the heady days of the boom.
The federal government would create a new world of bonded debt to pay for the savings
banks that would be seized. When Bush announced his bailout that February, he stated
that $40 billion had already been poured into the S&L sinkhole, and that he proposed to
issue an additional $50 billion in new bonds through a financing corporation, a subsidiary