‘Kids these days! [A reader] writes, “My lectures about financial responsibility appear to have failed: yesterday [my teenaged daughter] charged $23,148,855,308,184,500.00 at the drug store.” You would think Visa would have caught the error and addressed it, if you were high. What Visa actually did was slap a $20 “negative balance” fee on it, of course.’
And this, from the comments to the post:
“Maybe the bank mistakenly converted the charge into Zimbabwe dollars?”
Can we ever reencumber the pursuit of affluence with virtue again? via RealClearMarkets.
What is even more remarkable is the way in which the alleged fleecing of wealthy people and charities – investors who should have known better or employed people who did – of many billions of dollars serves as a mirror for the broader culture. It shows how we went wrong and where we are left, now that we realize our errors.
The main difference really is that the purported victims, or enablers, or co-fantasists of the trader Bernard Madoff say they found out their wealth was illusory all of a sudden, whereas for most people in the English-speaking world, this is happening little by little.
My only quibble is putting the speculation in the past tense. The economy will continue to be a Ponzi scheme, and the bailout program is intended to ensure that.
Krugman interviewed by Andrew Leonard:
“The revised and expanded edition of Paul Krugman’s The Return of Depression Economics, originally published in 1999 but back in bookstores last week, features, in a reasonably large font on the front cover, the mini-bio: “Winner of the Nobel Prize in Economics.” The choice of the (re)publication date couldn’t be better. Not only are Krugman’s predictions of economic doom, first made in the wake of the Asian financial crisis of 1997, even more relevant as 2008 comes to a close, but he is also accepting his award in Stockholm, Sweden, this week. When I reviewed The Conscience of a Liberal a year ago, I wrote, “Now is a good time to be Paul Krugman.” I spoke too soon. Now is an even better time to be Paul Krugman.
You write that some economists (and this certainly goes for many Salon readers) believe that recessions and even depressions are necessary mechanisms for purging economies that have gotten out of control. There’s even a moralistic aspect to it: In the U.S., all those greedy investment bankers and housing speculators and overconsuming Americans are getting their comeuppance. But you seem to be suggesting something different: that the government can kick-start the economic machine back into motion, that we don’t have to be subjected to the torture of a severe recession. What do you say to those critics who claim that stimulating the economy out of this recession will just lead to bigger problems down the road?
My favorite Keynes essay is “The Great Slump of 1930,” in which he says “We have magneto [alternator] trouble.” If you’ve got electrical problems with your engine, that doesn’t mean you should junk the whole car. If part of your financial system has gone haywire, that doesn’t mean that millions of workers have to be unemployed.
There’s kind of a weird double-think involved in arguments that the slump should be allowed to follow its natural course. It’s true that classical economics says that we should let market forces do their work; but classical economics also says that severe recessions can’t happen. This idea that we must not intervene is based on a worldview that is refuted by the very fact that the economy is in the mess it’s in.”
Dmitry Orlov: “Hello, everyone! The talk you are about to hear is the result of a lengthy process on my part. My specialty is in thinking about and, unfortunately, predicting collapse. My method is based on comparison: I watched the Soviet Union collapse, and, since I am also familiar with the details of the situation in the United States, I can make comparisons between these two failed superpowers.”
Via Energy Bulletin via the null device. Orlov describes five stages of collapse — financial, commercial, political, social and cultural, and places the progress of the collapse of the US on that map.