In case you may not have heard it yet, our economy is a little under the weather lately. The patient is, however, under the watchful eye of a crack team of economic physicians, led by doctors Benanke, Paulson, Bush and, new to the team, Dr. Obama.
Their diagnosis is that the patient is sick. They have been trying various treatments, and when the treatment turns out to hurt the patient, they assume that all that is needed is a bigger dose. The analogy they use is that of a heart attack patient. They think they need to apply massive stimulation, stat!
Unfortunately for the patient, the doctors are the ones that made it ill in the first place. The real problem from the start was over-stimulation syndrome. What the patient needs is bed rest and a vacation from the doctors.
If the consequences weren’t so serious, the doctor play would almost be funny. Through most of the 2000’s, the economic medical team was applying serious stimulation. Interest rates were held significantly below market rates. The intravenous pump was cranked up and money poured in at a furious rate. Inflation appeared to be under control, so they kept the pump going strong. What they didn’t notice, however, was that their measurements of inflation don’t include half of the economy. The half that they measured was just fine. The other half was blowing up like a balloon. When the measured half started to inflate, it was already too late.
The real estate market is not included in the measurements of inflation, nor the credit markets, nor the financial markets. Massive bubbles in these areas didn’t set off the inflation alarm to our doctors, so they ignored the obvious symptoms that were building over the course of years. When, all of sudden, the bubble popped and became an open wound, they started running around franticly looking for someone to blame their incompetence on. The free market is, again, their scapegoat. It had worked so well in fooling the patient all of the other times, why not use it again.
The stimulus continues, and the dose is being cranked up to really serious levels. Uh, excuse me doctors. How well has that stimulus worked so far? Not so well, you say, the patient is getting worse? Hmmm, do you think that maybe the medicine could be the problem? Oh, you’re trying different brands. The stimulus checks to individuals didn’t work a year ago. So you switched to stimulating wealthy bankers. The patient still was getting sicker, so you started to stimulate wealthy non-bankers. You say you think you have the solution now?
Dr. Bernanke has come up with a brilliant treatment, sure to make the patient healthy. It is the transfer of toxic assets in the system from the wealthy, politically connected class to what they consider the slimy, worthless taxpaying class. Since mega-bankers made lots of money making incredibly irresponsible loans, and their wealth is now in jeopardy because those irresponsible loans are becoming uncollectible, the good doctor has come up with the idea of a “bad bank”. Seriously. No, I’m not kidding. The federal government, aka the American taxpayer, should, under this plan, establish an official bank for the express purpose of paying good money from taxpayers to wealthy bankers in exchange for the bad loans that they have on their books. That way, international bankers wouldn’t have to worry their little heads about how to collect on them. They can get back to business as usual, making stupid loans, which the taxpayer will purchase if they become uncollectible.
The good part about the bad bank idea is that the American taxpayers would own all of these valuable assets that they can collect money from to pay back their “investment”. The bad part of the idea is that they are generally uncollectible. That is the very reason that they are called bad loans. Hello, is anybody home!
It is becoming painfully obvious that 1. politicians have nothing but disdain for taxpayers, and 2. our economic medical team is a fraud. They have absolutely no idea what they are doing and are stabbing their scalpel in the dark. Even if the economy starts to come back, the massive amount of medicine they are applying is guaranteeing the next bubble in a few years, the resulting massive hemorrhage, and the further abuse of the patient as time goes on.
It’s time for the patient to dismiss the quacks. They have done enough damage. The next step should be to sue the economic physicians for incompetence and malpractice.