From the Onion this summer: Recession-Plagued Nation Demands New Bubble To Invest In:
WASHINGTON—A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.
"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution."
The current economic woes, brought on by the collapse of the so-called "housing bubble," are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.
And then, in a case of life imitating art satirizing life, here's Steve Chapman in the Star Tribune today:
. . . Most of our problems stem from the bursting of the housing bubble. That sent home prices plunging, which reduced the value of mortgages and mortgage-backed securities, which caused losses at banks, which forced a cutback in lending, which squelched consumer spending, which brought the economy to a halt. Which started the whole miserable cycle over again.
But if the crisis stems from declining real estate values, why not stop them from declining? A spell of inflation would arrest the slide by pushing up the price of everything. As home prices stabilize, mortgage-backed securities would regain value, banks would get financially stronger, and loan officers would stop hiding in the vault.
Sounds pretty simple, doesn't it, Steve?
Is he out of his freakin' mind, Spotty?
Watch your tongue, grasshopper, but a pretty good case can be made. Oh, sure, Steve says we have to be careful, but we're good at that:
Once inflation has performed its useful role, it will have to be tamed. But the Fed has a lot of experience doing that. What it doesn't have is experience bringing the economy out of a deep recession or a depression.
Steve wants to get back to where we were! Wouldn't that be nice. But here's James Kunstler, cheerful fellow that he is, suggesting another tack:
We have to, so to speak, get to place mentally where we can face the kinds of change that are now necessary and unavoidable. We're not there yet. It's not clear whether the elected new national leadership knows just how severe the required changes will really be. Surely the public would be shocked to grasp what's in store. Probably the worst thing we can do now would be to mount a campaign to stay where we are, lost in raptures of happy motoring and blue-light-special shopping.
Steve isn't there, is he Spotty?
Spot is afraid not, grasshopper.