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http://myecon101.blogspot.com/

Tuesday, March 24, 2009
Alternate Reality 2
I cant’ escape it. No matter where I turn I see news that makes no sense and has only a minimal attachment to reality - at least my reality. By that I mean the reality that I grew up with. The reality where America - the place I was born and raised - was a constitutional republic with a capitalist economic system. That’s where I came from. That’s my comfort zone.

But now I’m not even sure we still have a constitution. If we do it must be in tatters. Today I read that my President wants to hand over to Tiny Tim Geithner the authority to seize any businesses - not just banks - that he sees as a threat to the stability of the economy. And once those companies are seized, the government would have the right to set salaries and bonuses for all employees as well as having direct oversight over company operation.

Huh? Six months ago if anyone had told me that I would have thought they’d been dippin’ into the ‘good stuff’. Now it’s just part of the daily news. And what’s even weirder is it doesn’t seem to be worrying anybody - AT ALL!!! That’s right, everybody’s too worried over the AIG bonuses.

Next I find that one of the U.S. Senators from Maryland is introducing a bill allowing newspapers to become non-profit organizations so that the industry can survive. Okay...? Maybe that’s what they should have done for the buggy whip manufacturers in the early 20th century. Make them ‘non-profits’ so they won’t have to fail.

And then I listen to the happy-face media telling me that the economy may have turned the corner because housing sales and the stock markets are up. Well guess what? Housing inventories haven’t dropped, so increased sales is really just a sign of banks offloading more houses with bad mortgages at depressed prices. And why is the stock market up? Because of Timmy’s kewl plan to unfreeze the credit markets.

Guess what? We’re already almost 4 TRILLION DOLLARS into unfreezing the markets without any results. What makes anyone think this NEW plan - which is really just another way to hand out more bailout money in the form of ‘loans’ that never need to be paid back - is going to change anything. When asked today what his backup plan was if this doesn’t work, Geithner’s essential response was: “Back-up plan? What back-up plan?” According to Tim, all it will take to make this successful is the ‘will to make it work’.

Gee, Tim. How insightful. Are you also going to offer free courses in positive thinking as well, so we all have ‘the will to make it work’? Sheesh!!!