Friday, April 10, 2020

Time Keeps On Ticking

4 weeks since Mitch took his 3 day weekend, but can't fault him too much, as the entire Congress disappeared soon after.

To tell a very simple story, in the financial crisis a bunch of money went poof, largely in the banking system, when the housing bubble popped. They fixed that by just replacing all the money the banks lost. That was the easiest thing in the world to do, bailing out rich people, and it's what they all pat themselves on the back for doing. "Rich people lost all the money and we gave it all back to them. Genius! I deserve some kind of award."

The second part was the extreme drop in wealth for normal people due to the collapsing housing bubble and the cascading recession effects subsequently. The stimulus bill didn't do nothing about that, but it didn't do nearly enough, and combined with the deliberate plan not to help people who couldn't pay their mortgages, but to simply extend their agony, ensured an extended recession. That was the slightly harder bit, and they did a horrible job, somewhat deliberately. You can argue that Benevolent Dictator Obama would have done a somewhat better job if he had been unconstrained by any other considerations, but he would not have done a much better job. They had a big slush fund to help people that they didn't even spend!

But now we don't have an "oops the banks lost all the money" crisis. We have a "the country is shut down for 3 months crisis." And while we will never let rich people lose their money, it doesn't even really solve any part of the problem right now. Sure maybe keeping the financial system alive is necessary, if by design, but it's like spending all the money keeping the transhipment center open, and its owners rich, as the trucks stop showing up entirely.