Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Tuesday, July 15, 2008

America Needs Another Bubble

The Onion has a painfully funny article today: Recession-Plagued Nation Demands New Bubble to Invest In. It hurts because it's true. Excerpts from the article:

"Perhaps the new bubble could have something to do with watching movies on cell phones," said investment banker Greg Carlisle of the New York firm Carlisle, Shaloe & Graves. "Or, say, medicine, or shipping. Or clouds. The manner of bubble isn't important—just as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy..."

"The U.S. economy cannot survive on sound investments alone," Carlisle added.

[...]"America needs another bubble," said Chicago investor Bob Taiken. "At this point, bubbles are the only thing keeping us afloat."

4 comments:

USWest said...

Last night, I was listening to an edition of Bill Moyers Journal. He was talking with Steve Fraiser of the Wall Street Journal about inequality and the American Dream . They were comparing now to the Gilded Age of the 19th Century. And they were discussing the destruction of the middle class. It was interesting. Bill Moyers asked his guest why it has taken so long to notice the economic damage done do the middle class. The response was telling. Because of the growing availability of credit, the crisis in the middle class was muted. People were getting by because they were maxing out 3 and 4 credit cards. So consumer spending (thus demand) was "up", productivity was "up", people were working, and people were managing, barley. Their wages were stagnating. He pointed out that production has jumped to the highest levels ever, but wages haven't moved. The guest pointed out that due to recent cuts that GM workers accepted in order to "keep their jobs", a worker starting in the company today will be making what his grandfather started out making in the same company. That struck me hard.

One of the problems that we have in this country is complacency and over independence. Because we are so set to make it on our own, we often hide the reality. And government operatives (I no longer call them leaders) look at the stock statistics and say, "everything looks dandy." But they don't scratch the surface.

And if you have time, Listen as well to the episode on American Conservativism. It was also quite interesting.

Raised By Republicans said...

In some part the commodities/oil price hikes are exactly that next bubble. They are largely driven by speculative investment.

Anonymous said...

RBR: I have heard mixed opinions on the speculative investement. There are so many factors at play in the energy market, that to blame it all on speculators would be an over-simplification. I am sure there is some of that going on. But I also think there is more to it.

Anonymous said...

Another note: I was listening to an interview with Regan's old advisor,Murray Weidenbaum the other day. He said that there is nothing in the US economic history, not even the Depression, that is like what is going on int he economy now. And he pointed out that most economists, including himself, are having trouble making sense of it. The bottom line is that we need major change. And I am skpetical we will be able to make it in time.