Listening to folks like Larry Kudlow and the U.S. Chamber of Commerce react with such malice towards the House’s rejection of the Wall Street Welfare Bill, I’m reminded of a line from the Andrew Lloyd Webber musical, “The Phantom of the Opera”: “Should these commands be ignored, a disaster beyond your imagination will occur!”
(Here is the Chamber press release)
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Fed Pumps Further $630 Billion Into Financial System
I will try to explain this important news story for you now.
Imagine Crusoe and Friday living on an island. Crusoe picks apples and Friday catches fish all day. Every day Crusoe trades 5 of his apples for 2 fish from Friday. Sometimes Crusoe takes a day off, to rest or to fix his ladder, and on those days he gives Friday a banana leaf with “IOU 10 apples” (5 apples principal and 5 apples interest) written on it, receiving his usual fish . The next day he picks more apples than usual and gives Friday 15 apples in exchange for the IOU and 2 more fish. The IOU is destroyed by wrapping it around the fish and baking them over hot coals. That day Friday eats 10 apples, having gone without the day before, and saves the extra 5 apples to eat sometime in the future when he plans to take a day off to mend his nets.
Then Crusoe takes a month off in order to build himself a big new sleeping hut with bamboo plumbing and a mahogany tiki bar. Afterward he’s way behind in his apple collecting, and he realizes he’s going to have to work extra hard in the next several months to pay back all the IOUs he gave out. He’s a bit worried because he used the wood from his ladder to build a deck and he’s nor sure he can meet his obligations. Friday doesn’t seem very interested in exchanging huts with him in order to wipe out the debt.
But Crusoe’s pet monkey Theodore (whom he humorously refers to as “The Ted”) decides to help Crusoe by giving him 630 billion crisp, new banana leaves with “IOU 10 apples” written on them. Walking around with a bailing can full of these IOUs makes Crusoe feel like he is on top of the world. “Look”, he says, “I got a bailout. Stability has returned!” He starts planning an even larger addition to his hut.
Of course there are not even this many apples on the island, and even if there were Crusoe couldn’t pick that many in the rest of his life.
Crusoe’s buddy Friday, who has continued fishing as normal, starts to question the value of the IOUs and starts demanding twice as many of the banana leaves with “10 apples” written on them for the same amount of fish. The Ted tries to make everyone happy by printing “IOU” on another 500 trillion banana leaves and passing them to Crusoe as an emergency measure, agreed upon unanimously in a special late-night conference between Crusoe, The Ted, and Crusoe’s pet parrot. Shortly afterward Friday refuses to take any more banana leaves, Crusoe has to give Friday his house and his apple orchard, and then he has to either work for Friday picking apples all day and mending fishing nets at night, or starve.
My dad can’t believe the House’s rejection of the bill. Yes, the decision was pretty close…Lots of Republicans opposed it, and even many Democrats. I recently became a Libertarian, and espouse to what Rep. Ron Paul says on many issues. Gee…I thought I was a Democrat!! Doesn’t seem so now. This bill’s nearness to the election and how they tried to rush it through is so strange too…Anyways, I was opposed to the Wall Street bailout….though I’m not sure how the banks, businesses and people react….what do we do now? This month I’m just trying to figure out who to vote for….My dad would vote for Obama…..He’s a great speaker and seems very smart…..I’m looking elsewhere according to my principles…….The economy seems to be issue #1 here in the US and abroad.
The antagonism and attitude of the commentators to the electorate is unbelievable. “How stupid could people be to reject this proposal.”
the attached clip is one pathetic example — I love it!!!
http://www.cnbc.com/id/15840232?video=872162980&play=1
I watched NBC news with Brian Williams today. Their presentation and views wasn’t so bad, as they attempted to present both sides of the story. But ABC news. That’s a whole different story. A news network for real communists.
Team mises,
Its the anger and disorientation of people personally, professionally, and financially entrenched in a failed system/business model who are incapable of contemplating their own non-existence.
What did you see, Clarice? What did you see?
Lambs. They were screaming.
I will admit to knowing little to nothing about economics, but came here to vent since from what I understand you folks seem to agree with me.
I am absolutely infuriated with the attitude of the talking heads on TV news right now. They are acting like a bunch of spoiled children who have finally been told ‘no’ and are throwing tantrums because of it.
I haven’t a clue whether the proposed bailout was a good idea, but watching these people go through what looks like tax money detox, even an economic ignoramus like me can read between the lines and see that this ‘no’ was long overdue.
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I will admit to knowing little to nothing about economics, but came here to vent since from what I understand you folks seem to agree with me.
I am absolutely infuriated with the attitude of the talking heads on TV news right now. They are acting like a bunch of spoiled children who have finally been told ‘no’ and are throwing tantrums because of it.
I haven’t a clue whether the proposed bailout was a good idea, but watching these people go through what looks like tax money detox, even an economic ignoramus like me can read between the lines and see that this ‘no’ was long overdue.”
Hmmmmm. Perhaps you should read a little.
http://mises.org/books/fed.pdf
That’s too hardcore. This could bea better introduction:
What has government done to our money?
http://mises.org/money.asp
Ohhh Henry, that’s excellent. I have posted it on Australianopinion.com, hope you don’t mind.
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