Posted on 12/29/2008 8:50:46 AM PST by BGHater
The United States lived in Lever-Lever Land too long. Like Peter Pan, the country has refused to grow up. The object of the stimulus plans offered by the present and the next US administrations is to return to Lever-Lever Land, that is, to debt-financed consumption. It won't work. Leverage is for the young, who borrow to build homes and start businesses. The financial crisis forces Americans to act their age, that is, to save rather than borrow and spend.
For a world economy geared to servicing the once-insatiable maw of American consumption, that is very bad news for 2009. Recovery cannot begin until Americans have restored their decimated wealth by saving - an effort that will take years - or until the youthful emerging markets start importing from the US, rather than exporting to it.
America's leaders haven't yet had the required moment of clarity. Its financial leaders still think the problem is a mere matter of confidence. These were the same people who swallowed their own sales pitch.
The crisis began in June 2007 with the failure of a Bear Stearns hedge fund backed by partners' money, and peaked in September 2008 with the failure of Lehman Brothers, a shop where managers famously had to drink the Kool-Aid. Wall Street fell on its own sharp elbows and died. Firms that survived the Great Depression have failed or merged into a mockery of their former piratical selves. Why did the kidders succeed in kidding themselves? Don't blame them: think of a middle-aged Peter Pan unwilling to admit that he shouldn't be flying.
(Excerpt) Read more at atimes.com ...
Firms that survived the Great Depression have failed or merged into a mockery of their former piratical selves.
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The mistake this article makes is to assume we’ve woken up. We’ve replaced leverage with a handout from Uncle Sam. The common denominator is that people are living beyond their means and want someone else to pay for it—either by borrowing or getting a government handout (have “the rich” pay for it).
That was one mistake. There are several, including mistaking "Never-Never Land" for "Lever-Lever Land".
I’ll say we haven’t woken up. More Americans than ever seem to think a handout from Uncle Sam will make everything all better. When the Reckoning (capital R) finally comes, it will be very brutal and ugly, but (potentially) entertaining. The spectacle of Madeoff’s investors waking up to his Ponzi scheme is but a dress rehersal for what is install for us. I half expect us to start canibalizing anyone making over $200K a year before all is said and done.
That was one mistake. There are several, including mistaking “Never-Never Land” for “Lever-Lever Land”.
Absolutely the wrong thing to do.
Agreed. Today’s ‘Millenium Generation’ have few that understand ‘productivity’. They want it all and they want it NOW!
Those ‘industrious individuals’ who lived within their means and created ‘wealth’ without debt are the only ones who left who can pay for this debacle. (The ‘rich’ have been decimated.)
Those ‘industrious individuals’ are now discussing ‘capital flight’ and ‘capital strike’.
You’re right. Governmants don’t create wealth. They have been know, however, to print paper that they call money.
This Spengler and Mark Steyn have the same theory - demography guides everything.
It will be difficult for the US to change our borrowing ways. Our Gov’t is now encouraging debt spending, and the world also has bought into the system of recycling their “excess” savings back to the USA, to keep their own currencies low, and their export businesses humming along.
Hee hee, I think you are right. I guess I've no sense of humor for this economic crap. ;-D
I did think it might be an oriental having trouble with his enunciation. %-D
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