The first page headline was in the form of a question: "Saving the Economy?" The article described the plan to insert up to two trillion bucks into the banking system. The purpose, of course, is to "stimulate" the economy.
I was reminded of the lemonade stands we had as kids. One of our moms would donate a pitcher of lemonade (in those days, made with actual lemons!) and we’d haul a card table, the pitcher of lemonade, and some glasses down to the curb and shout "Lemonade!" at passing cars. On occasion, a motorist would actually stop and enjoy a glass of our delicious beverage, at a cost of a nickel or dime — I don’t remember the price we charged. In a short time, though, we’d lose interest in the beverage business, gulp down the lemonade ourselves, and go on to other enterprises.
But we were foolish! How could we expect our lemonade stand to prosper with such under-capitalization? We needed, at least, a sign at the end of the block, advising oncoming drivers of the lemonade oasis ahead. And the stand itself should have been more impressive, perhaps with lighting, and bold colors. We could improve our efficiency with an electric juicer, and the purchase of lemons and sugar in bulk.
What we needed, in a word (okay, two), was a stimulus package. Well, in theory, anyway. In actuality, we never even considered approaching our parents for such a package, knowing instinctively that the potential customers to make such a venture profitable just didn’t exist. Lemons by the bushel, sugar by the ton, and electric juicers whirring away, just weren’t going to make people who might be thirsty for lemonade drive down our street, looking for kids with a pitcher of lemonade on a card table.
The proposed bailout, of course, is infinitely more sophisticated, in that it is proposed by distinguished gentlemen in suits, instead of shorts and T-shirts. Big words are used. There are TV cameras everywhere. Really important! But the principle is the same: pouring billions into losing ventures won’t stimulate consumers to buy. Giving a few trillion to the auto makers, for example, doesn’t even slightly titillate my new-car-buying impulse.
So a question arises, at least in my mind: how can what was obvious to a bunch of kids be so unapparent to our nation’s financial geniuses? How can educated adults urge a program that is so clearly flawed? Some of these financiers and congressmen have advanced degrees and important jobs in the world of money and banking.
Moreover, the Keynesian idea of stimulating the economy via government spending is not new. It’s been tried before; it never works. Doesn’t the current generation of whiz kids know this? Do they never talk to anyone save themselves?
An answer presents itself to me, and I should probably keep mum about it, but I won’t. Here goes: the powers that be WANT the economy to fail. Why? That’s a good question, but I can only speculate about the answer. What is clear, however, is that economic collapse seems guaranteed if the stimulus package is implemented, and those advocating it must surely know it.
The Titanic struck the iceberg by accident. The captain didn’t aim for it. But the planes striking the Twin Towers were directed toward them. The crash was purposeful. You can ask "Why?" but the deliberate nature of the act cannot be denied.
It is remarkable that people who wouldn’t trust a used-car salesman, or TV huckster, any farther than they could throw them, will nod in serious agreement with bailout salesmen, and stimulus hucksters, even though these shills have demonstrated no great capacity for honesty, integrity, or righteousness.
I guess we get what we deserve. Or worse.
Dr. Hein [send him mail] is author of All Work & No Pay, which is out of print, but may occasionally be obtained on eBay.
