We’ve got too many economists mouthing off about the economy. This has got to stop. Paulson did the right thing in refusing to consult any economists when he put a $700 billion price tag on his Crony Bailout. That’s because his plan has nothing to do with economic reality and everything to do with bailing out his buddies. This could be why 190 economists think his plan sucks.
That troublemaking economist, Nouriel Roubini went even further when he said:
The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed householders and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown.
This is no time for realists to be running their mouths. Illusion and fantasy drives the American economy; it is a system so fragile and complex and even a whiff of reality would be enough to bring it crashing down. Its prosperity demands a blind faith that the Flying Spaghetti Monster will set things right. All America needs is a rock-solid faith in Pastafarianism. At this juncture in our history we can’t afford anything that resembles critical thinking.
I got quite a chuckle out of another article in which Paulson reassured the public that the bailout would unclog jammed financial markets.
Of course it will since Bernanke deliberately clogged them to force Congress to go along with the bailout. Writer Mark Whitney tells us that:
Market Ticker has provided charts from the Federal Reserve that prove that Bernanke has withdrawn $125 billion from the banking system in the last four days alone to create a crisis situation that will incite credit market mayhem and increase the likelihood of passing the bill. This is coercion of the worst kind.
Of course it is; no price is too high to save our bankers.
And it may be stratospherically high before all is said and done. The same article quotes a highly-respected Swiss investor who estimates that the bailout could cost $5 trillion, and, incidentally, Chinese regulators have asked domestic banks to stop lending to US banks in interbank money markets.
It looks like we’ll have to hold a bake sale to raise the cash.
That’s the beauty of a well-executed scam: it leaves the mark broke before he even knows he’s been scammed.
Come January, you and your cronies will be enjoying the warm sunlight in the south of France while the suckers back home burn their worthless pension plans to keep warm because they can no longer afford heating oil.
But, that’s what feral capitalism is all about.