Matchstick economics; ever hear of it before? I doubt it, since I just dreamed the term up a moment ago. Much of the current mortgage industry crisis tasted familiar, so I did some quick research into the savings and loan debacle that George Bush Sr. faced during his tenure. Back then, taxpayer money bailed out the savings and loan industry when it collapsed, to the tune of $124 billion. Instead of our prisons filling with crooked executives, there were a few publicized hand slaps. Here we are again; tax money is bailing out the economy because of the sins of the mortgage banking / brokerage industry, which I will loosely call a mutant lovechild of the old savings and loan industry. I sincerely doubt that many, if any, crooked white-collars will be pressed into our crowded prisons after all of the blame finishes flowing. We can only hope.
When the hell are we going to get it right? Markets and economies boom on easy credit and the illusion of “free money,” then it all melts down into an nebulous blob of very real, very bad debt. Many conservatives, including yours truly, believe government should be laissez-faire, that free markets will mandate decorum. We conservatives keep winding up with egg splattered on our faces when the lack of regulation leads to abuses of inconceivable magnitude. Maybe we overdid “deregulation.” Steve Bonine commented in his blog about the little known sleeping monster called credit default swaps. If that $45 trillion, unregulated creature also begins to run amok, take your bets off the table and race with the devil to the shelter of hell.
The august members of The Federal Reserve Board of Governors should finally admit that whenever they appear to get it right, it is nothing but a freak accident. There are too many factors compounding their mission, and they have too few resources to do anything with finesse. The Fed postures, ponders, and pontificates, but in truth they are purely pusillanimous pretenders; one day a computer will replace them all.
We conservatives are praying for a miracle to pull this economy out of the toilet before November. It does not matter that half of our lawmakers are Democrats; the Republicans had the helm when the sewage hit the fan. Will the economy get fixed quickly? Good luck, because each falling matchstick knocks loose two more from the stack, and there seems to be an endless supply of them falling. Let us hope that some spark does not send it all up in flames. Even an armchair economist can see the possibilities on how bleak all of this may become. Our Commander in Chief believes the cure is to avoid uttering the word “recession,” think good thoughts, and give everyone a few hundred bucks. If it works before November, we can call it dumb-luck economics.
James A. Zachary Jr.
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