Here's a new thought exercise for you to try out in the coming weeks. When thinking about how you would react to a severe recession and market crunch, try this new model on for size. Every time a critical juncture is reached where policy-makers can choose the hard path to cleansing the system or the easier path of trying to pander to emotion and ignore what's going on in the reality-based community, assume that through the end of the year the choice will always be to pander.
This adds a lot of spice to watching the infotainment channels like CNBC, CNN , et al. Medicare is going to bankrupt the country? Expand spending. Debt service on housing loans and credit cards are a cancer eating away at the majority of the population? Encourage taking on more debt.
I propose this model, courtesy of a recent story from The Onion:
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..."
If only this satire wasn't playing out as policy...
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Have a safe, productive and happy weekend.