This amount of arrogance, the sheer impardonable pretension, is bound to be popular.
Hyperinflation is Coming
All of these bailouts are going to have the effect of making our money worth a lot less.
The criminals looting the Treasury should be hung for treason.
Throw them all out. The Democrats, Republicans, and anyone who voted for the Troubled Asset Relief Program, voted to bail out Fannie and Freddie, or who give away money to any failing company.
Companies which fail should go bankrupt. Propping them up will only make the problem worse, as managers (both in the bailed out firms and in the rest who observe them) see that failure is rewarded.
The pathological avoidance of pain is going to ruin us, and in fact, may already have done so.
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3 comments:
The very concept of our money is being hijacked right in front of our noses, Loren. Wait for The One and his Congress to fully redefine it - politically. ~Jimmy
The fear, and it is a real fear, is of crippling deflation. The basic logic of deflation is too little money chasing to many goods.
During the Great Depression farmers plowed under their fields because the price of their corn (for example) was less than the cost to harvest it. Today, judging from the Baltic Dry Index, the price of shipping has dropped to the point where it is cheaper to scuttle your ships than haul goods from one country to another.
The effect of spiraling deflation is the economy completely locks up. Why buy something today when it will be cheaper tomorrow and why buy it tomorrow if it will be cheaper still next week? Why manufacture a widget if by the time you finishing making it is worth less than when you started?
Trillions of dollars have disappeared from world economies because of the collapse of the banking industry. Money has become a solid, it has stopped moving because of the fear of lending. Hence the panicky reaction of the government to create liquidity.
I don't like these bailouts any more than you do, although for a different reason. As a socialist(?), I dislike throwing money at rich people.
But, there is a tsunami boiling off our coast. You fear an overreaction to it and I fear an under-reaction to it.
I understand the fear of deflation.
But just because deflation causes economic paralysis, and we're seeing paralysis, doesn't mean we're experiencing deflation.
And even if we are, even if this is Great Depression II, I don't want to see the government intervene. The threat of government abuse of power is just too great.
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