Credit bailout: Adding quicksand to the quicksand pool

It is incredible that intelligent people think that extending credit is going to pull us out of the "credit quicksand" in which we are sinking. "Hell yes, dump another load of quicksand in that pool of quicksand, big guy."

In a market economy, wealth is being able to produce goods and services that have real value ... goods and services that OTHER folks want so they will exchange THEIR goods and services for ours. That's what gives these goods and services value.

In a "free" nation (you know, "liberty and justice for all", "life, liberty, and the pursuit of happiness") labor is paid a fair share of the wealth it helps create, building a strong middle class and the strongest of all possible nations -- this I believe, and I also believed we proved it in and following WWII.

Credit and money have no intrinsic value EXCEPT the value of adding efficiency to the transactions of exchanging goods and services that do have intrinsic/real value. AND that is based on trust between the parties to the transactions that they will honor the value of the instruments of debt (credit) and money used in the transaction.

Even an idiot can see where this is leading.

When we failed to hold our leaders feet to the fire -- even though the American people tried mightily by deluging Congress with emails and phone calls -- and get them to enact a jobs stimulus program building infrastructure that adds real value to a mature economy like ours (and HAS to be produced collectively either as a private consortium or government program), thereby keeping us from sinking deeper into the credit quicksand.

And to have the Republicans who have the awesome example of President Eisenhower and his federal highway program as a gigantic monument to prosperity looming in the background, come up with a $700 Billion blank check extension of credit as a solution ... was so absurd it, it was unfathomable by we the people.

Notes:

First, I do not believe in a "free market" (as a macro concept). There is no such thing, not even hypothetically.

Second, markets emerged out of a world filled with natural resources already here and religious beliefs, hence the "Invisible Hand' bs. As these natural resources have been wedded to the creative imagination/inventiveness of the human mind, a whole new world has emerged ... a world that now requires the human creative imagination to take it to each new level.

It used to be the opening of new trade routes to new cultures and war that give us new products. Now it is programs like going to the moon and the internet -- which are extensions of military/national security initiatives -- which open new "resource" horizons for creating new goods and services that others want ... and therefore add real value in a market economy.

It is our faith in our creative imagination when given the opportunity for inventiveness that should guide us ... ESPECIALLY us, a nation born out of the creative courage of a man sailing west into the unknown ... looking for new trade routes ...

Finally, it is only in an unfettered market that you learn what people want ... but that is a different concept then this "Invisible Hand" crap that is so outdated that we should be laughing. Yes, Newton described why an apple falls from a tree ... but we are a ways beyond that these days in understanding the dynamics of our universe. Likewise should we be beyond Adam Smith.

In my opinion ...

Posted by hglindquist on 10/05/08 at 8:38PM

Ah, folks ... I have a little egg on my face right about now. Just found out from 60 Minutes that the math for slicing and dicing the subpirmes was done by Physicists ...

Well ... my guess is that some economist most likely told 'em that home prices had never decreased in value since the recovery from the Great Depression.

You can see how that would screw up a function, can't you? ;-)