One Brick Short

Why does everything have to be so scary?

It seems that all of this spending, all of this bailing and all of this stock-shoring shipping of money from taxpayers to banks and financial institutions could be
providing those who hate us with the means to attack us. That’s scary.

Let’s admit there are people who hate us. You may remember them from a few years back when they did a bit of urban renewal and changed the skyline of New York City. I’m afraid I haven’t forgiven them for that, despite my amazing—if not irritating—capacity to live and let live. They’re scary.

Second, let’s admit we’re spending a crock of money, a big, giant, hairy crock at that. We’re expecting a deficit close to two trillion dollars, a figure I find hard to imagine because I get lost in all of the zeros.

Third, let’s admit our economy is ill and that’s why we’re giving it shots of spending.

Yup, it’s all very scary.

Now, according to the Associated Press, some security analysts are saying our enemies overseas and at home can use our medicine against us. They can nuke us through the economy by recruiting rich bond buyers instead of suicide bombers, according to U.S. intelligence official, Dennis Blair. (No doubt it’s easier to attract financial terrorists than suicide exploders. The retirement benefits have got to be better.)

Here’s a scary scenario: A foreign government or a terrorist group with serious money sets up several overseas hedge funds, buys U.S. stocks and then dumps them, short-selling a major financial index or targeting key U.S. companies. The attack picks up speed over several hours, creating panic and confusion in world stock markets that, like a school of fish panicked by a squid, changes directions more than a man lost in San Francisco looking for a World-Wide Wrestling Texas Cage Match Death Bout.
With Wall Street being so panicky and finicky and in lousy fiscal shape, the attack could work wonders. Experts say that pumping up the economy again would be difficult, as we’ve already shipped trillions into the system.

“If the stock market crashes, banks are not going to be in a position to jump in. We’re on our own,“ said one fiscal security analyst.

Now that’s scary. Who’s going to take care of us if the government can’t do it?

To pay for the bailout and stimulus plans, the government must issue bonds, many of which will be bought by China and other countries. Beijing could use those bonds as a weapon, one scenario goes. Selling them in bulk would send U.S. interest rates rising, providing a new drag on the economy.

That’s scary, if unlikely, as China’s econony and ours are closely tied thanks to decades of off-shore manufacturing.

George Foresman, a former Homeland Security undersecretary who now provides security consulting to financial companies: “The national security community is awakening to a new era,“ Foresman told the Associated Press. “They can’t be overly focused on the Middle East at the expense of the rest of the world. And they can’t be overly focused on the military at the expense of the global economy.“

That, of course, means that security cannot focus on anything, but must instead focus on everything. That, in turn, means there will be a little bit of knowledge about a lot of things and a lot of knowledge of nothing. That’s pretty scary.

Mommy!