The Electric Monk

“we’re fucked” recap

vruz: langer:

So Geithner’s plan is out, and a consensus is beginning to emerge: we’re fucked!

• James Galbraith says “the Geithner plan is a Rube Goldberg device for shifting inevitable losses from the banks to the Treasury, preserving the big banks and their incumbent management in all their dysfunctional glory.”
• Dean Baker notes that “house prices have another 20 percent to fall to correct back to trend levels,” adding that “unless someone is smoking something illegal, they have zero reason to believe they will rise again.”
• Paul Krugman laments that “when the plan fails, as it almost surely will, the administration will have shot its bolt: it won’t be able to come back to Congress for a plan that might actually work. What an awful mess.”

Ironic that Joseph Schumpeter, in his 1942 economics classic Capitalism, Socialism, and Democracy, described the driving force behind the capitalist market system as “creative destruction”.

Boy, how right he was.