Wednesday, November 26, 2008

Consumers...


AKA Debtors are getting yet-another-chance to borrow more money! Cool! For those with maxed-out credit cards, or unable to buy a New SUV, or whose Homeowners-Line-Of-Credit has run out: A Life-Line To Consumers! Now, step right up, the lending window is Open For Business at the bank of your choice. Financed with your tax dollars (of course!).
The redoubtable Hank Paulson, a notorious One-Trick Dog, is focused entirely on the movement of money, his only-stock-in-trade. Mr. Secretary Paulson has dealt another $800,000,000,000.00 to his clients in the Finance Industry; an industry whose total output is 0 (nothing, that is, nil, nothing, zip). Except that these days borrowing from the gov't. seems to be a lot more profitable than actually trying to make/sell something tangible. Tangible product is so 20th century I suppose.
The only drawbacks to Mr. Paulson's plan:
a. When people go into Survival Mode, they stop buying all those wonderful things (like Maxi-SUV's), and budget for necessities only; like food, shelter, and absurdly overpriced toys for the Grandchildren. We'll only have a short time to wait 'til Black Friday tells us how bad (or perhaps not-so-bad) the shopping portion of the economy has become.
b. At some point in time this Supply-Side Capital-Formation Genius-Of-The-Market economic model (the Upstairs/Downstairs Model) founders on the resulting destruction of the middle class. The wage-earners go deeper in debt, lose everything, end up, as Tennesee Ernie Ford said:
CONCLUSION: I wouldn't recommend buying a used car from this man. Or, indeed, from anybody associated with the (blessedly soon-to-be-outgoing) present toxic administration.

No comments: