LIFE - We're here...

Quick note, and I'll try to keep this simple. We have arrived. The roller coaster has reached it's peak, and it's time for the downward swoop. If you're watching the news and hearing about the US stimulus package being argued over in the houses of legislative branch and the executive, you'll see arguments over just how to sustain business as usual. A business that has failed. Many large US banks are insolvent. The only thing keeping anything going is the hope that the stimulus plan will inject some cash back in to the system. Let me give a simple analogy as to why this is not going to work:

You cannot pay off a credit card with another credit card if your future incoming isn't going to increase.

...And the USA's future income isn't going to increase. It doesn't make anything of any value that cannot be bought from elsewhere at a lower cost, and in tough times, cost is the deciding factor. Economic growth over the past 30 years in the US has been sustained by war, ever increasingly complex financial instruments which are ultimately just ponzi schemes, a tech boom, and a housing boom.

Don't get me wrong. I'm rooting for President Obama to try something that will make this crash easier, and by easier I mean people won't starve and freeze to death. I don't give a shit about luxuries. I'm talking about people making it through this with their lives intact.

Now the most despicable thing about this is, some will try to profit from this crash. IMHO, this needs to be made a crime. Just as war profiteering should be illegal (Try telling that to Halliburton), profiteering from any attempts to get economic recovery going should also be illegal. But it's not. And it won't be. So somewhere, out of the billions (And the actual trillions that have already been spend and more that will continue to be spent), which your children and your children's children will end up paying for the bill, someone will be taking their cut.

What is the end game? When those who are profiting out of this exercise say, "Time to pay the bill", and you say "But I can't. All I have is my life", and they will say "Well that will do then"...


MikeE said...

If you remove the profit motive from business, you remove the whole point of it.

This financial crisis wasn't created by profit, it was created by well meaning, but misguided govt intervention. They should have read Henry Hazlitts "Economics in One Lesson" written back in 1946 which warned:

“Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment.”

These are teh same govt garunteed mortgages which caused the crisis, of which Obama was the biggest cheerleader for in the name of "affordable housing".

RePete said...

Mike, Mike, Mike. We get it. You're a Libertarian. You're a white guy. Someday, you'll be a middle aged white guy Libertarian, and you too can carry on being part of the problem. We get it. You want to be rich. It's all about you. Go on. Go find a really tall building somewhere and shout "ME! ME! ME!" at the top of your lungs. It will probably make you feel better.

Seriously. "These are teh same govt garunteed mortgages which caused the crisis". If that is your over-simplification for the 'cause' of this problem, then what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.