The Sky is Falling, The Sky is Falling

I was stunned to see the promoters of Cowboy Capitalism screaming at the top of their lungs, “Bernanke, you do not know how bad it is out there. The financial system is going to crash! Drop the Fed Rate now!” I thought they were going to blow a gasket, perhaps with blood gushing from the juggler veins as they prodded the Federal Reserve Chairman to change Fed Policy to save the banking institutions. Yes the voices of Cowboy Capitalism, AKA let the free market take care of everything, promoting governmental intervention to save Financial America from its own short-sighted, greedy, unscrupulous behavior.

Why are they so concerned? The DOW is off less than 8 percent from all time highs. Before a Bear market could be in place the DOW would have to lose 2,000 points. The problem is that the financial institutions are overextended. They made bad decisions and are looking for a governmental bailout. Well so much for the CEOs being worth 100 million a year, any dummy like me could have told you that. Perhaps I will get a call from some big financial institution to run their “Keep us from doing stupid things” department.

Yes, the financial system is in trouble. Yes, some big boys are going to lose a great deal of money. Yes, those hundred million dollar CEOs were actually greedy and risk bankrupting the primary US financial institutions. No, the government should not intervene.

No one can accuse our government of sound economic policy. The implementation Reaganomic policies has been eating away at our national equity and making Americans poorer every day to the benefit of a few people in the upper echelons of society. I, and many others have been saying for years that the pendulum has swung too far and that our way of life, as we have known it, will change dramatically. Unbridled greed, self-interest without the enlightened adjective, have taken us to a breaking point.

Finance is one of our major industries. The other two driving portions of our economy are healthcare and housing. Woops! Housing is suffering from the same stupidity as the financial sector. I wonder if the 12% of the US economy that actually makes something will be able to pull us through?

It is time to pay the piper. Somehow, when I read about the pre 1929 crash I have to make sure we have not switched to 2004-2007. There are many similarities in the 1920s. Let’s hope the 2008-2018 are not the 1930s.

If the late 1920s was the age of the stockbroker, the early 1930s was a time for apple-sellers - traditionally, a job resorted to by those down on their luck.

The link between the crash and the Depression is not clear-cut; the economic cycle was arguably moving to recession with or without a crash. But 1929 eliminated the optimism of the 1920s.

Tags: Government Politics Corporate America Finance Economy Reaganomics