Scariest Thing I’ve Seen in a Long Time

Via Atrios. 

I’ve had a bad feeling about the economy for a long time, especially since the housing bubble burst. 

But I’m self-admittedly uneducated about the economy.  Jim Cramer, though, is not.  Follow the link and watch the video. 

Here’s one of the milder comments (transcribed myself so sorry if it’s not exactly accurate). 

Fourteen million people took a mortgage in the last three years.  7 million of them took teaser rates or took piggy-back rates.  They will lose their homes. 

Drowning government in a bathtub

I took the title of this post from a Grover Norquist quote. 

I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub

The true power of this statement was on display in New Orleans during Hurricane Katrina and it was on display this last week when a steam pipe burst in New York City.  Rick Perlstein has more. 

And while you’re at it, check out the final installment of his “Foreclosing of America” series.  Rick finishes off his series by comparing the conservative and progressive approach to the housing crisis and offers a compelling vision of the progressive program. 

It would rescue millions of Americans from everyday anxiety in a way not seen since the passage of Medicare in 1965.

But it would do much more. It would spur a virtuous circle that would succor not merely millions of Americans, but 300 million Americans—every American. Spur consumption without expanding consumer debt. Preserve home values in every neighborhood. Make taking a flier on a first house or a bigger house or a nicer house a safe thing to do and not a reckless thing to do. Disincentivize corporate fleecing. Save the capital markets from volatility. Dissolve some of the inequality that comes of structurally more volatile capital markets. Save the middle class. Expand the tax base. Use that expanded tax base to vouchsafe programs—universal healthcare, affordable college—that expand the middle class, spur entrepreneurship, and take us back to the top: spurring consumption without expanding consumer debt, preserving home values, etc., etc., etc.

Virtuous circle.

That’s the way liberal government used to do it. It seized upon crises to produce solutions that closed down the possibility of future crises. Insurance. Some wise person once remarked that a government is an insurance firm with an army. Well, our insurance firm sucks. The foreclosing of America proves it. Fix it, and—listen closely, ambitious politicians—you remind people that government is there to help them. The stock of the party that people traditionally associate with government skyrockets. They stop voting for the party that affects to despise government.

Getting Owned – Part III of Perlstein’s series

Rick Perlstein has part 3 up now of his “The Foreclosing of America” series. 

Here is where I wrote about the first two parts and provided links.  Rick’s writing brings into sharp focus the absolute irresponsibility of policy making under neo-conservative rule. 

The Ownership Society – Get Owned

I’m no economist.  But it seems like the legitimate conservative business model, at least the classical one which is taught in Econ 101, has been replaced by a business model designed to exaggerate the usefulness of its products, gouge its customers, and avoid any accountability. 

Rick Perlstein has written two articles in a series about the so-called “Ownership Society,” the housing bust, the political currents that led us there, and the consequences for middle America.  The great thing about Rick’s writing is that he is able to tie together the symbols used by conservatives, symbols which are rooted deeply into the imagery of American mythology, to push agendas that are very often antithetical to middle American values. 

So you advertise a system by which all hard-working Americans can buy a home, invest, move up the economic ladder, and move closer to economic freedom.  But what you sell is extreme debt, poverty, and stagnancy. 

The Foreclosing of America – Part One. 

The Foreclosing of America – Part Two.