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PrintSeptember 30, 2008
Congress: Please Stay Home
I'm going to go out on a limb and make an economic prediction: if there is no bailout, the economy will keep muddling along without even entering a formal recession. The Dow will stay comfortably above 10,000 and real GDP growth will stay positive.
Drudge has posted two significant articles. The first from CNN explains that there is no catastrophe and that we should do nothing but let the companies that screwed up go bankrupt, and then fix what government broke in the first place, primarily Fannie and Freddie.
The second article from the National Post points out why we should be fighting the bailout tooth and nail. It reminds us that the fifth point in Karl Marx's Communist Manifesto was the "centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly."
Everyone from Germany and Japan to Australia is screaming for the bailout to be passed. (We suddenly have friends around the world again, now that we might toss a trillion dollars out the window.) Yet no one can explain the cause and effect relationships in any of this. If you haven't noticed, 75 years hence our experts still cannot explain the cause of the Depression.
For once, Harry Reid was right, when he said, "no one knows what to do." They still don't. In fact, they never did and they never will. The bailout is based on nothing other than the maxim "Don't just stand there, do something." Herbert Hoover followed that same maxim and turned a recession into a Depression. And funny thing: every time they "do something," it enacts another point of Marx's manifesto.
Housing prices might have fallen about 20% from the peak of the housing bubble . I'm having trouble believing that a 20% drop in value in one sector of the economy of one country, from a peak that was artificially high in the first place, will lead to a global economic catastrophe -- a catastrophe that can only be avoided by taking a trillion dollars from people who earned it and buying "troubled assets" with it.
There is no real crisis, except one of fear. Fortunately, the population is not buying it. Funny how "leaders" are always warning us against panicking. Who's panicking now? The leaders are in a panic, and Main Street is telling Congress to stay home. I'm with Main Street. Stay home, Congress. Isn't there Ramadan or something you need to honor?
As I write, Congress is taking the day off and the Dow is up 371.
