Economists living in a dream world

WBBM radio reported today that economists are increasingly convinced that the United States will fall into recession soon. One economist they quoted said he believed that we were already in a recession, that it probably started in the fourth quarter of last year, and that it will probably be over by mid-year when people start spending their rebate checks.

This guy can’t really believe these rebate checks will stop a recession can he?

The ContraCosta Times reported in December that an Associated Press  analysis of financial data from 17 of the largest credit card issuers and found

The value of credit card accounts at least 30 days late jumped 26 percent from a year earlier to $17.3 billion in October.

Does this sound like something a $600 check is going to fix?

The foreclosure rate continues to grow, the dollar is worth .47 compare to what it was worth in 1984 (DOL statistics), the cost of milk alone has jumped 13% since last year.

And then there are the banks. They are borrowing billions from the Fed, which, not being a government agency but merely a conglomeration of private banks owned by the Rothschild’s, Rockefeller and JP Morgan, probably does NOT have an unlimited supply of money and will likely cut that little auction jackpot out at some point.

What happens then?

Step in the government who wants to bail people out, some of  whom made bad decisions, bought houses they couldn’t afford, and lived large on the equity which has now all but disappeared due to the drop in housing prices.

The idea of a moratorium on foreclosures is lovely, but the banks borrowed the money to loan people to begin with. Who is going to make the payments they owe, do they just borrow more from the fed?

People victimized by predatory lenders should be helped, but the predatory lenders should be on the hook. Prosecute them for their practices and fine them for each mortgage they sold. Pool that money and help these people out, but only these people.

The Wall Street jerks who brought us this mess, and received billions in bonuses for doing it,  should also be held responsible. But don’t expect that to happen if Clinton gets in because the top people, CEO’s, CFO’s of the major investment firms, Goldman Sachs, JP Morgan, Lehman Brothers, etc., all contributed tens of thousands to her campaign  for president.  (Check out huffington.fundrace.com) Somehow I don’t think she’s looking our for us. If I’m not mistaken I heard her say she would bail out homes up to a value of $650,000.

Sounds like idiots who bought property with Wall Street bonuses to me.

No, it’s time to stop listening to the economists and just look around us with a critical eye. There is no way we can avoid a recession and I would be amazed if we didn’t avoid a depression.

My guess is as soon as the election is over and the new president in is in place, the fed policy will abruptly change, the discount window will be slammed shut, the auction will be over and the banks will be on their own, probably to fail.

At least that way Bush won’t have to add a depression to the long list of dismal failures his two terms will already be remembered for.