July 25, 2007

Mortgage Woes Stop Economy in its Tracks

Nouriel Roubini has long been dismissed as not recognizing how well the Bush economy is doing. That's because he saw how unstable the housing market was and had predicted a recession would occur as the housing bubble burst. Long before the economic cheerleaders began to see the tsunami coming, he reported that the lending practices driving the housing market were so bad as to be fraudulent and that the damage they would do to the economy could not be quarantined to the subprime market. Even as the subprime market started to show true distress, the economic cheerleaders have been adamant that the economy that Bush built was resilient and nothing could stop the juggernaut of American economic might. Indeed, just this week, the cabbage had been declaiming how exceptionally well this economy is doing.

Checking in on Professor Roubini's site, we find that the normally staid bloomberg.com is shrieking about the economic problems stemming from the spillover of bad debt from the subprime market into the prime-time market. Even the Fed Chair is no longer quite so sanguine that we'll escape this crashing wave.

The professor links to PIMPO Bond's piece by Bill Gross to give a truer perspective of what really is happening to the economy.

So when is enough, enough? Now is the time, long overdue in fact, to admit that for the rich, for the mega-rich of this country, that enough is never enough, and it is therefore incumbent upon government to rectify today’s imbalances. "The way our society equalizes incomes" argues ex-American Airlines CEO Bob Crandall, "is through much higher taxes than we have today. There is no other way." Well said, Bob. Enough said, Bob. Because enough, when it comes to the gilded 21st century rich, has clearly become too much.

A gilded age that has 5% of the country's income flowing to the top 0.01 of the country. That is one more legacy the Bush administration has bequeathed to us.

Posted by Mary at July 25, 2007 12:13 AM | Economy | Technorati links |

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