THE SAD, SORRY SAGAS OF SEPTEMBER (c)

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THE SAD, SORRY SAGAS OF SEPTEMBER

 

BY IRV RIKON

 

         Certain Septembers have been sorry sagas during the      presidencies of George W. Bush and Barack Obama.  Those who lived through them won't forget the events that occurred since all American lives were and still are affected by them. 

 

         1. September 11, 2001.  Islamic Al-Qaeda militants, in a coordinated attack, hijacked four commercial aircraft, two slamming into the World Trade Center in New York City, bringing down the tall buildings, a third hitting the Pentagon in Washington, D. C.   With passengers fighting to prevent further damage, the fourth crashed into a field, killing everyone aboard.  In all, a total of almost 3,000 people died.  Many more suffered injuries.  So began the war on terrorism .

 

        Not knowing quite what had happened, the George W. Bush administration initially moved slowly, then responded by sending American armed forces to invade Iraq.  Here was one

of the worst military blunders in any nation's history.

 

        No hijacker was Iraqi.  Most were either Saudi Arabian or Egyptian.  Washington envisioned this to be a short war.  It was in fact America's longest, lasting over a decade.  Al-Qaeda saw it as useful propaganda: "Americans are killing Muslims."  Americans perceived that terrorists had attacked them first.

 

        With the United States striking the wrong target, Al-Qaeda, born in Afghanistan, got extra time to grow.  Beginning as a guerilla organization, protracted fighting allowed it to learn urban warfare.  New technologies enabled members to communicate easily over long distances.  They dispersed to Afghanistan, Pakistan or wherever sympathizers might be.  "The Arab Spring" helped them.  Amidst protest and chaos in various countries, especially in the Near and Middle East and Africa, Al-Qaeda could offer help, in the process gaining traction and adding affiliates.

 

        America had stirred up a hornet's nest.  The war raged on and threatened to become global.  Historians will have much to tell future generations.

 

        2.  September, 2008, The Financial Crisis and The Great Recession.  In 1929 the Stock Market crashed and ushered in the decade-long Great Depression.  Economists still analyze its causes.   During one weekend in early September, 2008, a number of American financial institutions collapsed, leading into The Great Recession which, government claims to the contrary, remains in 2013.  Herewith are some highlights:

 

         In March, 2008, the Federal Reserve had intervened to bail out failing investment bank Bear Stearns.  In July, Freddie Mac and Fannie Mae, troubled government-sponsored agencies that held most American mortgages, received aid, the Treasury Department guaranteeing $25 billion against bad loans, the Federal Housing Administration guaranteeing $300 billion in new loans. 

 

        Then, on Thursday, September 11, 2008, Secretary of the Treasury Henry Paulson, born in Palm Beach, Florida, and

Federal Reserve Chairman Ben Bernanke appeared before a hastily-called joint session of a "stunned" Congress, and as one Senator put it, were told "that we're literally days away from a complete meltdown of our financial system, with all the implications here at home and globally."  Extraordinary powers were given to the two non-elected officials that they might immediately act to stem the crisis. 

 

       On Monday, September 15, Lehman Brothers, America's fourth largest investment bank, with over $600 billion in assets, declared bankruptcy.  The Dow Jones industrial average of the Stock Exchange dropped 504 points.  On Tuesday, September 16, the Federal Reserve bailed out AIG, the world's largest insurer, with an $85 billion loan.

 

         During that same period indebted Merrill Lynch, a venerable brokerage house, was absorbed into the Bank of America.  Washington Mutual, America's largest mortgage lender and important savings bank, much in debt, was taken over by JP Morgan Chase.

 

        There was more, a lot more.  On Saturday, September 20, Paulson and Bernanke sent a $700 billion bailout package to Congress.  On September 29 Congress voted against it.  The Dow fell 777 points, its biggest single-day drop in history.  The Senate passed it in October at roughly the same time as the Labor Department announced that 159,000 jobs had been lost in September.

 

         All this happened against a vital political backdrop.  Mr. Bush was still President.  He had inherited from Bill Clinton, his predecessor, a budget surplus.  Now, with the country still at war, America had a budget deficit of over $5 trillion dollars. 

 

         Barack Obama won the first of his two presidential terms in November, 2008.  He enlarged the war by sending American forces into Afghanistan, (too little and too late.)   Under his Administration the national debt increased and is estimated today to be somewhere between $9 trillion to $13 trillion.  (To the average individual such numbers are unfathomable.)       

 

         What led to the 2008 Financial Crisis and subsequent Great Recession?  Much of the onus has fallen upon housing, borrowers, lenders, mortgages.

 

          To countless persons "The American Dream" included owning one's own home.   In the opening decades of the 21st century both government and financial institutions promoted it.  Lenders promised cheap loans and mortgages.  Many who really couldn't afford it nevertheless borrowed to pay for their dream.

 

         But very many lenders, including some of the biggest banks, understood the situation and sold or subdivided the mortgages they held to others which, in turn, were sometimes sold and subdivided again.  Eventually, it was not always known who held the mortgages.  In some instances, the same parcel was sold to several speculators.  Economists came to refer to all of this as the "shadow banking system".

 

         Meanwhile, the economy did not grow.  More people lost their jobs.  Government inaction fueled uncertainty.  Banks now hesitated to loan, and businesses, unsure of what might next unfold, hesitated to hire.  People who could not afford to pay their mortgages or even their groceries and utilities simply walked away from their homes, leaving them vacant.

 

         Particular age groups were hit hard: Senior citizens, many dependent upon Social Security and who had little or no other sources of income; the first of the Baby Boomers, some not yet eligible for Social Security but deemed "too old" for employers to retain or to hire; young people entering the work force: in a world of uncertainty, would-be employers stayed with what they had and knew.

 

        The immediate above is "conventional wisdom," yet other factors prolonged the economic decline:

 

         Government inaction became Congressional "gridlock".  Republicans and Democrats disagreed on how to proceed, the result being little of substance got done, and uncertainty mounted.

 

        Overpopulation had too many people chasing too few jobs.  A problem at home and abroad, this was a factor in "The Arab Spring".  Unemployment among youths led to idleness, restlessness, demonstrations, riots.  Arabs tend to have high

birthrates.  In some developing countries half or more of the population is under 20 or 30 years of age.

 

         Globalization increased job competition as American industrialists moved factories to countries having low wages, thereby taking away jobs from higher-wage Americans.  Yet globalization is a two-way street.  Foreigners from around the world invested in America, buying American bonds and other paper, propping up the economy. They also created jobs.  In 2008, for example, the government bailed out General Motors even as Toyota, Honda and Hyundai, Japanese and Korean companies, built factories in America, adding to the American labor force.

 

        Technology displaced workers and continues to do so.  When did you last see an elevator operator in a highrise building?  The telephone company answers incoming calls not with a human being but with an automated voice.  Chili's, a restaurant chain, is planning to limit its number of waiters by having on each table tablets from which food is ordered while a machine accepts credit cards for payment.

 

         Once again, historians will have much to write about this period.       

              

         September 11, 2012.   The American Consulate in Benghazi, Libya, was overrun by terrorists.  The Ambassador, who had shortly before requested increased security, was tortured and killed as were several of his aides.  Exactly one year later, September 11, 2013, a lone gunman shot and killed 12 people in the Navy Department compound in Washington, D. C., again raising the question of security at vital American installations.

 

          Within a day, it was established that the shooter had been mentally unstable.  The head of the National Rifle Association raised the specter of mental instability as cause of the shooting.  Perhaps, but while some unfortunate people are mentally unstable, not all pose danger to others.  Rifles, guns, machine guns and ammunition are manufactured and sold for one and only one purpose -- to kill.

 

          September, 2013, bore witness to Barack Obama's  indecision and vacillation.  The President had drawn a verbal "Red line" to Syrian leaders:  Do not use poison gas on your people or America will strike you.  Poison gas was used; people died.  Mr. Obama reiterated his resolve to attack.  But when Great Britain's Parliament voted against getting involved in another foreign battleground, the President  retreated, asking Congress to vote.  When it became apparent that Congress and the American public opposed entry into a Syrian Civil War, the vote was cancelled.

 

          The Russians threw something of a lifeline to Mr. Obama, suggesting that the Syrian issue be diplomatically discussed.  Top ministers met and exchanged ideas.  A week and more went by while the world anxiously awaited the outcome.  In New York, the annual meeting of the United Nations began the final week of September, 2013.  The Iranian President, Hassan Rouhani, proposed a closer dialogue with the United States.

 

          What happens next remains to be seen.  The war that began September 11, 2001, will continue because terrorists want it to.  But perhaps nations that opposed each other can attain a more peaceful accord with mutual understanding and greater cooperation than in the recent past.

 

         As of  this writing, the first week in October, the American Congress is still gridlocked.  For want of funding, federal workers are being furloughed.  Lawmakers threaten to "shut down" the government.  With America pushing everywhere for democracy, is Congress a fit role model when it seems unable to govern or finance its own nation?