A blog containing tequila and truth,
science and skepticism, culture and
cynicism, wordsmithing and wonder,
and an abundance of alliteration.
The fundamentals of our economy are sound. Basic capitalism is alive and well and will continue to be after the recession. The fact that jobless rates are not going to reach Depression levels and that most economists predict we will start to pull out of this in late 2009 is pretty good evidence that the economy IS sound. What we had in late 2008 was the economy correcting itself. The housing market corrected itself. The investment industry corrected itself. That is what a functional and sound economy does.
When most people refer to a sound economy, they mean; "My home has not been foreclosed" and "I have a job with decent benefits." And no, the economy is NOT sound, or there wouldn't be the need for a multi-$T bailout of the financial sector. The economy is acting like it's been on a cocaine bender for the last 15 years.Oh, and Dana... this made me LOL!
Homes are being foreclosed on because people tried to get more home than they could afford i.e. un-sound financial decisions. The market is biting them for it. The necessity of the bailouts is open to debate. A lot of people feel the best thing would have been to let all parties involved fail. It's what we used to do in America which is why we not longer have Pan-Am. Unemployment rates are highest among low-skilled workers. Why? because we have a global economy and they are being squeezed out by foreign competition for low-wage jobs. How do they fix that? The sound financial advice is to learn a new skills which makes them more difficult to replace. Companies across the US are begging for skilled labor, but no one wants to provide it anymore.
It's all the consumers' fault, right Mike? Never mind that banks and loan companies are supposed to analyze risk and act appropriately, or that they are far better equipped than the consumer for that analysis. Corporations, for all the MBA's and accountants they hire, are mindless beasts. They'll nosh on the bottom line and never look up to see what it does to tomorrow.
No one made them take mortgages they couldn't pay...that's bad judegement. Plus a lot of those loan defaults were based on fradulent applications. The lenders screwed up too and they should have paid for it. The feds saved them because they were worried about the ripple effect. I would have just let it happen and dealt with the fallout.
What you're studiously ignoring, Mike, is that no one made the banks offer those loans, either. Quoting nonsense about "pressure" that was brought by the government to create more loans won't do as an explanation, either. The banks sought that "pressure". They also sought making it legal to make deceptive loans, and Congress complied.Anyone with the least bit of sense, me for instance was perfectly capable of seeing where those changes would lead. Yet we're bailing out the banks.Comparing jobless rates of the 1920s to now is absurd. Many people are beyond even looking for regular employment now. They aren't considered among to be among the unemployed. Like the consumer price index, which no longer includes most of the things we consume, this number has been gamed so much as to be meaningless, except in contrast to the previous month or two.Our educational system is getting worse, our infrastructures are crumbling and outdated, our manufacturing base has been exported to Asia and Mexico, and the financial system is a mess. That financial system is run by people who seem determined to make us think they're both inhumanly stupid and preturnaturally greedy at the same time. Just what fundamentals, beyond the illusory "basic capitalism" instinct, is it you're referring to?
Post a Comment