Tuesday, July 28, 2009

Now Reading

Kevin Phillips' BAD MONEY. A relevant excerpt given JHK's latest:
(ed. note: As a brief background, Phillips is a former Nixon staffer who also wrote the condemnation of the religious right's takeover of the Grand ol' Party in AMERICAN THEOCRACY.
"Let me hypothesize: If these innovations and misadventures - prototypical "bad money" - hadn't been bailed out, the recession of 1990-91 would probably have deepened into the multiyear crisis of 1990-93 or some such. Cleansing, perhaps, but also horrible publicity for the "merchants of debt." So discredited, the financial sector might never have been able to manage its 1990s ascent. However, because these several collusions between political permissiveness and financial recklessness wer, in fact, absolved by alternating currents of government rescue and monetary ease, sector momentum survived. The prevailing wisdom, well reassured, still recalls the era's officially measured recession was a short and mild one."
In essence, we've done the same with the most recent iteration. Absolving all past sins for future economic retribution. We've put our fate on layaway.