The economy of the United States is now in the same condition as a householder with too many debts; borrowing works fine until you run out of lenders from whom you can safely borrow. Then the loan sharks thrive. In international terms, the loan sharks are now in the Far East and the Middle East. We no longer have enough credit to borrow from ourselves, at least at the rates we think we think we deserve.
I am writing this in my pajamas because of the disingenuous statement by the Vice-president this morning on GMA, that the current financial crisis was created at least in part by the housing crisis. He said it as though it were a surprise, and the interviewer let him get away with it. I couldn't wait to respond.
The statement was cynical or stupid, not wise and circumspect. The financial crisis was not created by the housing crisis; it was engineered by the persons and institutions who willfully forgot that the purpose of the housing industry is to provide homes for people, not windfall profits for themselves.
Yes, we expect a good return on our investments, but we should no more play the housing market to make a killing than we should bankrupt Safeway and sell off its refrigerators. It may be ethical to make a killing on the latest gizmo from Apple or Microsoft, but not on homes and groceries; such an effort has no more ethical or intellectual credibility than a chain letter.
Of course it doesn't work. Sooner or later it becomes impossible to buy, sell, or borrow. Those who engineer the calamity hope to be the last ones to sell at a profit and run with the money, leaving in their bitter wake the ruined hopes of millions of former home owners.
It happened, It has happened before. The milk is spilled. Let's move on. The lesson is, next time don't let the same people handle the milk!