Tuesday, October 14, 2008

What Is To Be Done 3

I got up this morning and went on line and discovered that the government is buying into nine big American banks, the stock market has bounced up and the economists I read are now mostly happy with the bail out.

The crisis may be over, and world economic system may once again have risen like a phoenix from its ashes or the undead from the grave.

So, am I a fool to worry?

I guess I will wait to call myself a fool till Nouriel Roubini says he is happy. Roubini (known as Dr. Doom) has a column in Forbes, which can be read online; and he has a deep distrust of the current economy.

The last essay by him I read said the underlying problems -- the collapse of real estate prices and a slowing economy -- remain.

According to him, we have two choices: a two-year recession or a ten-year depression.

He wants to pump a lot of money into places where it will help working Americans: increase unemployment benefits and create a public works program devoted to rebuilding the country's infrastructure and to green energy. Give block grants to state and local governments, so they too can work on the infrastructure and create jobs. Set up a federal program to help people with their mortgages and keep them in their homes. We really do not want all those empty houses.

It sounds good to me.

Of course, conservatives are already saying we cannot afford to help ordinary people, after spending so much to help the banks.

According to Roubini, if we do not deal with the underlying problems and get money to the working economy below the financial bubble or froth, we are looking at a ten-year-long depression.

On the plus side, there was a quite amazing full moon in the sky when I got up this morning; and the sky was bright, cloudless blue as I rode to work. The foliage is golden, with touches of red -- the maples and the sumac.


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