The Plebian

Pretty Economic Pictures for the Illiterate Masses

Main Stream News has a few Diamonds in the Rough

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I rarely read anything from the media powers that be that truly informs me of the ‘big picture’.  This article from CBS is an exception. 

FTA:

Now that the housing bubble, stock market bubble and commodities bubble have popped, the market is trying to adjust to non-bubbly conditions. Laws and regulations that interfere with that process can delay that adjustment and prolong the recession. (If a failing business is artificially propped up, valuable resources are being wasted rather than being used for productive purposes.)

Plus, the money for these bailouts has to come from somewhere. Last month Bloomberg News put the tab so far at $9.7 trillion, enough to hand each U.S. household a check for around $92,000, or pay off 90 percent of home mortgages in the country.

That money, of course, will come from taxes. We’ll borrow some from China, the largest foreign holder of Treasury debt, with the promise of paying it back with interest. Some will come from the Federal Reserve printing it, a move that devalues the greenback and leads to taxation through inflation.

At some point, though, the bailout costs will simply become too immense. George Mason University economics professor Russ Roberts wrote this week: “We can’t keep GM and AIG and Fannie and Freddie and every insolvent bank and every mortgage afloat. It can’t be done. It’s not a strategy. It’s just desperation to avoid pain. We’re going to have to start letting them fail. Sooner is better than later. Otherwise, we continue to throw good money after bad.”

We can’t bring back the bubble economy. But until our esteemed elected representatives in Washington figure that out, don’t expect an end to this downturn anytime soon.

It’s kind of funny that when certain voices were saying the very same things about our debt-driven consumption system a few years ago before reality showed its ugly face, mainstream media ignored these issues and people who did try to bring it to light were considered crazy or radical. 

I don’t know which is better, to be a sane person in a crazy world, or a crazy person in a sane world.  I feel I have lived in both now.

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