December 16, 2007

Economic Mess

George W Bush created a bigger mess than even Herbert Hoover according to Nobel Prize winning economist, Joseph Stiglitz. (via Digby)

Nouriel Roubini wants to see the world's Central Banks start lowering interest rates now in face of the deepening financial crisis that will come of the US hard landing. He believes that only fast action can reduce the real damage that is coming.

To conclude, as it is obvious to any sane person when your home is on fire it is not a good time to sit in front of the burning building to discuss the merits of the moral hazard of fire insurance on your incentive to recklessly smoking in bed or debate the additional damage to your home coming from excessive use of fire hoses (the risk of higher inflation down the line). When your home is on fire and there is serious risk of fire contagion to all of your town and beyond you want the entire fire brigade to provide enough liquidity to avoid entire edifice and town burning to the ground. And using hand-held and hand-carried buckets of water while pondering the intellectual merits of moral hazard of fire insurance in order deal with a major five-alarm fire - rather than using immediately your global fire brigade - is delusional. So it is time for the international central banks’ liquidity fire brigades to turn on the hoses and dealing with this most dangerous global fire.

...There are now serious risks of a US hard landing and a severe global economic slowdown together with a generalized seizure of liquidity and credit in US and global financial markets. This is the most severe financial crisis that the global economy has experienced in the last few decades. But so far central banks have been deluding themselves that this is a temporary run-of-the-mill liquidity shock. It is time to recognize the severity of this crisis and take policy actions – that while unable to prevent now unavoidable and necessary massive financial losses and unable to prevent a US recession - that will minimize the extent of the collateral damage to the global economy of the reckless US economic policies of the last six years.

And the arsonist, Alan Greenspan, thinks that throwing cash in the Shitpile will make it all better.

Posted by Mary at December 16, 2007 01:40 PM | Economy | Technorati links |
Comments

Uh - actually, the President has nothing to do with the budget of the USA - the Congress does.

Ever since the Congress has been in the hands of liberals from the beginning of this year the country's economic stance has weakened.

Posted by: JustaDog at December 16, 2007 01:56 PM

Read the article, JustADog and then come back and comment. Your bullyboy is very much responsible for the economic choices he picked.

Posted by: Mary at December 16, 2007 02:15 PM

Herbert Hoover??

A president may have little to do with the budget (no, you cannot just sweep veto power under the carpet!), but he has lots to do with encouraging a lower minimum wage, with signing in a bill to prevent personal bankruptcies, with allowing heaps of windfall profits on oil -- oh, he does lots to screw around with the economic climate.

Posted by: Scorpio at December 16, 2007 02:28 PM

Let's see.

Higher minimum wage == inflation.

Prevent personal bankruptcies == personal responsibility (are you against that?)

Windfalls of profit on oil? Look at that more closely and you might be surprised. After they foot the bill for exploration, taxes, regulatory costs, and logistical shipping their profits end up less than the damnable tax on the gas itself. But I digress, I just hate hearing the same mindless crap thrown at things until it sticks, even when it isn't true. Do you want them to decrease the cost of gas? Do you want people to drive more and pollute more? Why do you care if they increase the price of gas? Have you made such bad decisions that you have to travel and burn more gas and pollute more to live your life?

Sounds like a bit of pent up hypocrisy. As for the economic analysis, are you saying people that make bad decisions (variable rate takers) should be able to walk away for free? Do you think all those huge corporations that bought into investment packages that included those loans should walk away with huge profits? If they should then why give em' such a break with the failing of their financial mishandlings?

Then of course, I dont' understand why we have a debt based central bank in the first place. The worse economic events in American history have all occurred under the watch of this supposed socialist mechanism.

The great depression.
The socialist underpinning of FDR.
The loan scandals of the 80s.
The current loan idiocy.

As for Alan Greenspan. Take a read of Atlas Shrugged and his biogrphy(ies) and you might get what he's doing.

He's anti-federal reserve (he co-authored "Capitalism: The Unknown Ideal"), which wants rid of the federal reserve, wants independance of the markets in the US, wants farms to be able to compete on their own again, and general freedom for small business and Americans.

Now there is something that only the media watching mediocrity would miss.

But I digress, I stumbled on this garbled mess and will now leave.

Please now flame on. Or read up on those topics and actually find the truth.

Posted by: Adron at December 16, 2007 05:10 PM

Latest NSA synchro-2Pac
Latest NSA synchro

Latest NSA synchro

Posted by: ccoaler at December 17, 2007 12:47 AM

Of course, CORPORATE responsibility for making bS loans, hiring illegals, agitating for the ruination of national forests, and other high crimes and misdemeanors (wiretapping, anyone?) should be bailed our from our pockets or excused via other means so that the only responsibility is on the shoulders of the least able to bail out the fat monsters who hide behind corporations.

Hypocrisy is for everyone, dude.

Posted by: Scorpio at December 17, 2007 10:56 AM