Reddit Headline Hilarity
Dead Man Walking: Our beloved Dennis Kucinich, the man who's nuts are bigger than anyone in DC, save for Hillary, is proposing putting the Federal Reserve under government control. Dennis for the love of god, stay in crowded spaces. We love you!
Good times, good times.
The Economy Is In Worse Shape Than We Realize
Maybe some sacrificed chickens will fix the economy...
East Coast Economics has posted a dramatic visual explaining just how much borrowing our government has been doing over the last few months.
Check out the following which shows the $$$ amount borrowed by US banks from the Fed through Dec 2007; the spike marks the Savings & Loan Crisis at the end of the 1980s with borrowing maxing out at $8b.
[Then scroll down and] take a look at the [second] chart. It is the same graph as above, but [at a different scale, panned out, and] updated through the beginning of November ‘08.
So where is all of this borrowed money going? Paul Krugman delves into the details of the ongoing policy debate about how to deal with failing banks.
Old-fashioned voodoo economics - the belief in tax-cut magic - has been banished from civilized discourse. The supply-side cult has shrunk to the point that it contains only cranks, charlatans, and Republicans.
But recent news reports suggest that many influential people, including Federal Reserve officials, bank regulators, and, possibly, members of the incoming Obama administration, have become devotees of a new kind of voodoo: the belief that by performing elaborate financial rituals we can keep dead banks walking.
[Krugman sets up an excellent hypo detailing how this would work -- well worth reading.]
Why go through these contortions? The answer seems to be that Washington remains deathly afraid of the N-word - nationalization. The truth is that Gothamgroup and its sister institutions are already wards of the state, utterly dependent on taxpayer support; but nobody wants to recognize that fact and implement the obvious solution: an explicit, though temporary, government takeover.
Hence the popularity of the new voodoo, which claims, as I said, that elaborate financial rituals can reanimate dead banks.
Unfortunately, the price of this retreat into superstition may be high. I hope I'm wrong, but I suspect that taxpayers are about to get another raw deal - and that we're about to get another financial rescue plan that fails to do the job.
[Both articles via Robot Wisdom, image by Olly Moss.]