Wednesday, September 17, 2008

Stormy Times

I'm so preoccupied with the election and the economy that I barely noticed when the doctor who invented statins and another-- who had an amazing ability to imagine himself as a microbe-- received big awards. I hardly care that someone replicated the big bang and others worried about creating black holes. I'm paying attention to the financial meltdowns, as big brokerage houses and insurance companies topple into bankruptcy, threatening a rippling financial collapse.

There may be no solutions. Cascading bank failures may be an economic hurricane Ike, where you can see it coming but can't deflect it and can only pick up the pieces. But unlike with a hurricane, you can't chart that the problem will dissipate. The scariest thing is that money can just go poof.

But now everyone thinks this hurricane could have been prevented with better regulation. Even the deregulators are denouncing deregulation. McCain spent most of the 90s working for deregulation to produce more growth and infinite prosperity. Now he who doesn't understand economics (get real, who does?) is going to reform it all or as his running mate says, give it a complete overhaul--through 9/11 hearings!

Obama says "We know what went wrong" and need to get busy fixing it. That will be great if he can stabilize the housing market, which all experts say needs to happen before markets can stabilize. I'll tell you a secret about the housing market: It's largely a demographic phenomenon.

I'm sure measures can and will be taken. Perhaps greed will briefly go out of style. But what puzzles me is the basic question, Why why why are people--especially politicians--surprised when the economy contracts? One economic fact we know is that capitalism is subject to business cycles and things can't just go up up up all the time. This has been known since Joseph told Pharoah to put something away for the seven lean years.

Why do Republican administrations run up debt and deficits in times of prosperity so we're even worse off in stormy times? Oh well, just batten down your personal hatches, my friends.


Blogger Doc Bubbles said...

Thank you for pointing out how the Old Testament speaks to this situation :)

2:32 PM  

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