The bank bailout won’t prevent a deep recession or depression. That is being driven by the bubbles breaking and the malinvestments being liquidated. That process will continue on. A money infusion into banks won’t reverse it or undo it or stop it. For one thing, the malinvestments accrued over many years, and their amount is vastly greater than even this bailout bill. For another thing, the banks cannot “re-do” or prop up all those same investment projects gone bad. At best they will make new loans, and they will be reluctant even to do that because the liquidations going on … Continue reading The taxation black hole