There Was No Bu$h Boom, Only the Taste of the Grapes of Wrath

It's not just Krugman anymore.



The Business section of The New York Pravda acts mightily puzzled:

... The bigger problem is that the now-finished boom was, for most Americans, nothing of the sort. In 2000, at the end of the previous economic expansion, the median American family made about $61,000, according to the Census Bureau’s inflation-adjusted numbers. In 2007, in what looks to have been the final year of the most recent expansion, the median family, amazingly, seems to have made less — about $60,500.

This has never happened before, at least not for as long as the government has been keeping records. In every other expansion since World War II, the buying power of most American families grew while the economy did...

Puzzling indeed, unless you conclude, as maybe the 81% of America that thinks the country's going the wrong direction [i.e., down the drain] that there was no recovery, stupid after the Bu$hCo Recession of 2001, and in fact, things have only gotten worse.

They're accelerating as the spiral down the economic drain gets tighter.

Bu$hie's Ba$e, that well-heeled tiny minority that actually profits from the Empire and Endless War, is only noticing something's wrong now because things are getting so bad their wealth won't cushion them anymore.

Nothing they can do can fix it. They pretend it's a surprise. As Barry L. Ritholtz says:

...Surprise? Really?

I find it disturbing to see a fundamental lack of comprehension from a regional Fed President as to what the root causes of the Housing problem actually are.

Hey guys! Here's a clue: It ain't high interest rates. . .

For those of you that work in the financial industry and can't bring yourself to think the unthinkable, here's the problem, as Ritholz and Krugman and a lot of other non-Chicago School economists see it:

...consider the size of the derivative marketplace based upon mortgages: Everything from RMBS to CDOs to CDC. It runs into the trillions.

If they cannot be effectively priced, are these products essentially untradeable?

Consider these factors:

• The price relative to the requisite cost of research/due diligence;

• The size of the market relative to the overall regular and ongoing demand for that investment product;

• The buyers and sellers with an expertise and knowledge of this paper.

This may be the crux of the issue with subprime/derivative problem: The paper is, or at least should be, Untradeable...

Of course, if instead of concentrating on bailouts of Bu$hie's Ba$e, the Fed and Congress worked out policy to help the mortgagees pay their bills, all that paper might start to have value again.

But that's dead last priority in Washington, where the really big fat cats are too busy devouring the smaller ones to ever notice they've just about eaten all their seed corn, too.

Speaking of which apparently agribusiness is saying to hell with all that conservation and seed corn crap, the price of oil has the potential of making food a whole new kind of bubble. In your gas tank, of course.

Just what we needed for the Bu$h Depression, another Company Dust Bowl that accelerates global warming, too.