petedied: I'm surprised that my brother (jackdied) hasn't blogged about the economy yet.

Mrs. petedied: He's probably too busy looking for his wallet.

My response is entirely predictable: there are two sets of morons in the equation; first are the politicians who created this mess by allowing Freddie and Fannie to exist despite years of warnings [when the WSJ and NYT agree you know something is a bad idea] and who told the other bankers they would be crapped on if they didn't give mortgages to people who couldn't afford them (all the while taking giant campaign contributions from Freddie/Fannie). The other set of idiots was the banks who bought into the bubble bigtime, leveraging all their assets to the hilt. Well maybe they weren't such idiots because they knew the first set of idiots would bail them out when the bubble burst.

Now those self-same politicians are promising to spend $5k per taxpayer [NB, not per capita because most people don't pay taxes] to bail out those self-same bankers. In the process the pols are trying to steer as much of the mega dough (5% of the annual US GDP) to their chosen constituents as possible and not to solve the "emergency" they have declared exists.

If you want a simpler, alternate explanation look no farther than Austrian business cycle theory. Boom/bust cycles exist but fractional reserve banking magnifies the wobbles into crises. Put differently when the Fed prints money it has to go somewhere. The real amount of STUFF in the world doesn't change when there is more money but briefly it feels like it does because there is more money around. That fake money has to go somewhere so investments that were marginally unprofitable before end up getting funded by that extra money. Because they weren't really profitable they end up collapsing when the money tap gets turned off (and it must be turned off eventually or you end up with Zimbabwe levels of inflation). Much worse: during the bubble companies that would have been profitable otherwise get into price wars with those fake businesses and in the downturn get hammered just as hard.

By either explanation it's a giant clusterfuck and everybody loses. Except for the politicians because they can claim credit both for the good times and credit for ending the bad times.

PS, inform the Mrs that you used to lose your wallet so often you walked around with photocopies of your drivers license instead. Jeeze, I lose one document in my entire life (my passport) and now I'm Johnny-document-losing-guy forever.

PPS I'm testy because I just had a really bad night of bowling (average 130, ugh).