Butt Trust

There's a civics text that isn't taught in schools, but I think should be. You might not think of it as a civics textbook, but it really is. It's Charles Mackay's Extraordinary Popular Delusions & the Madness of Crowds.

In 1624, the Dutch went a little bit nuts about tulips, and a speculative bubble rose in which a single tulip bulb could be valued more than the price of a house. When the bubble burst and they realized they'd been behaving like idiots, do you really believe the Dutch government could have injected enough cash into the system to keep those tulip bulb values up?

In addition to the $700 billion bailout, which is now being called 'undersized' in the news, Obama and his newly empaneled Butt Trust, are cooking up an even bigger sequel.

When a friend of mine told me he'd liquidated his stocks and put the money in gold, I thought he was honestly nuts. I still think so, to an extent, because gold has never been a very good investment vehicle and the U.S. stock market has. But gold does hedge against inflation, and it's not as stupid as putting your retirement savings into a tulip bulb.

And inflation is written all over the Bush/Obama bailout strategy. Selling Treasury notes does not create wealth, it only dilutes the value of all the other dollars in the economy. Think about it: why not a $700 Trillion bailout? Send a check to everyone in America for $2 Trillion. Then we'd be sitting pretty, right? Except since all dollars do is mark the relative value of goods and services, a loaf of bread would suddenly sell for $10,000 or something like that.

People talk about what a bunch of right wing maniacs Fox News has, but I don't see it. I see them comparing Obama to FDR (and sometimes JFK), and they seem to think this is a compliment.

FDR did nothing but make the Great Depression deeper and longer. His re-elections were not based on success, but on the fear that the alternative was even worse.

Just because he's doing something doesn't mean it's something helpful.