Our Monumental Economic Stupidity

Mish points out just how stupid we’ve been:

…we bailed out Fannie Mae, Freddie Mac, Citigroup, and Bank of America bondholders while raping the GM bondholders (the latter so that Obama could appease the unions). In other words, Paulson, Geithner, Bernanke, Obama, and Congress effectively conspired to rob the poor to bail out the wealthy.

Supposedly this was done so that banks would start lending, and the economy would get the Fractional Reserve benefit (using the word benefit loosely) of debt expanding 10-1.

It did not work that way, nor will it because consumer and corporate debt remain, unemployment is high and rising, debt levels are intolerable, and consumer (and bank) attitudes towards debt and credit reached a secular peak and the pendulum to deleveraging has begun.

I recommend reading Mish’s whole post as well as the backup article he linked to. I’d like to assure one and all that I don’t lay blame for this entirely on Obama – I blame the system we built up from 1913 until today. A system based on usury and fiat money which is tailor made to benefit financial sharks at the expense of people who actually produce things – people who make, mine and grow things have been sacrificed on the altar of Faux-Capitalism. An economic system which apes the free market but which actually guarantees that our economy is increasingly unfree because wracked by debt and backed by fake money.

Now, Obama isn’t off the hook – if he’ll pay attention and start thinking about things, he’ll fire Geithner, figure out a way to replace Bernanke and start listening to genuine free market advocates who have all sorts of good ideas on how to both get rid of the debt and restart the process of wealth creation. Trouble is, Obama doesn’t seem to understand that the whole thing is falling apart and the stories about an improving economy are just so much smoke and mirrors put out by people who want to get more suckers in to the stock market before it crashes.

One thing certain, what we Americans will need to do is go back to a hard currency and encourage wealth creation rather than get-rich-quick usury. Until we do this, we’ll just continue to wallow in these economic doldrums – and don’t think it can’t go on forever: Japan has been stuck in this condition for 20 years and they still haven’t learned the lesson. Japan is set to pour yet more fake money in to the Japanese economy in order to “inflate” themselves back to prosperity – an idiotic idea which never had the least bit of merit to it (and thus, naturally, something liberals swear by).

A long, hard road back to prosperity lies ahead – and as long as Obama is in charge, we won’t even take the first step.