Krugman scares me - Updated
Read it all, it's one of his best ones ever, but here's the shorter version: You're not really poor now. You were never really rich. It was all an illusion. And btw, we're probably screwed.
Update: Cosa Nostradamus checks into comments with a really good response. Check it out.
[More posts daily at The Detroit News.]
Update: Cosa Nostradamus checks into comments with a really good response. Check it out.
[More posts daily at The Detroit News.]
Labels: economy
posted by Libby Spencer at 3:42 PM
2 Comments:
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In other words, nothing has changed in the last eight years, or in the last six months: Only the perceptions of people and organizations. They went from "irrational exuberance" to blind terror overnight, with no real justification for either.
The world is still turning on it's axis. The sun still shines every day. The crops keep coming in, everybody goes to work and does their jobs. The markets are up, the markets are down, so what?
If everything else was imaginary, then why worry if it all goes away? The one analogy with FDR and the Great Depression nobody seems to be making, or getting, is that there is "nothing to fear but fear itself." The biggest problem we have right now is psychological: Consumer confidence is down, and business confidence is even worse. The whole thing turns on "full faith and credit."
What we need to fix is the refusal to give credit, and the reluctance to use it, suddenly. If it had been a gradual withdrawal, it might not have been so bad. But this cold turkey thing is killing us.
The government needs to restore confidence in the short term and get things going again by guaranteeing good future transactions, not bailing out bad old ones. For the long term, the government needs to work on flattening out these boom & bust cycles that benefit only a few while hurting everyone else: Put the brakes on "irrational exuberance" when it occurs, by tightening credit and limiting excessive profits/bonuses. Then, when the terrors occur, prop up consumer confidence by loosening credit and spending Federal moneys on worth-while projects that provide good jobs in the short term. Make our economy work for us, and get out of this bipolar casino mentality.
When do I take over as Secretary of Psychology? First act: institutionalize all CEO's, pundits & "conservative" politicians. They are clearly infected with some communicable disease that spreads insanity like wildfire. I'll be working with the CDC to build an humane treatment center in Guantanamo. I hear it's nice there this time of year.
Or, we could use the former leper colony here at Kalaupapa. As long as they're out of human contact, it'll work. Cheney goes first. Then Rupert Murdoch. Thank Gawd and radical-liberal Nancy Pelosi for these sweeping new powers!
Don't worry, be happy!
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That's so well said Cosa. I vote you start as Secretary of Psychology immediately.
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