The Great Collapse and You

[n2doc]

By Kevin Drum| Fri Apr. 22, 2011 3:00 AM PDT
Earlier this week, David Frum wrote that although he's been a Reaganite free market true believer for nearly 30 years, he recently realized that the bargain he thought he had made simply hasn't been kept:

Especially after 2000, incomes did not much improve for middle-class Americans. The promise of macroeconomic stability proved a mirage: America and the world were hit in 2008 by the sharpest and widest financial crisis since the 1930s. Conservatives do not like to hear it, but the crisis originated in the malfunctioning of an under-regulated financial sector, not in government overspending or government over-generosity to less affluent homebuyers. Fannie Mae and Freddie Mac were bad actors, yes, but they could not have capsized the world economy by themselves. It took Goldman Sachs, Merrill Lynch, AIG, and — maybe above all — Standard & Poor’s and Moody’s to do that.

....Speaking only personally, I cannot take seriously the idea that the worst thing that has happened in the past three years is that government got bigger. Or that money was borrowed. Or that the number of people on food stamps and unemployment insurance and Medicaid increased. The worst thing was that tens of millions of Americans — and not only Americans — were plunged into unemployment, foreclosure, poverty. If food stamps and unemployment insurance, and Medicaid mitigated those disasters, then two cheers for food stamps, unemployment insurance, and Medicaid.

Obviously Frum is still considerably to my right. There are just a lot of things we're never going to agree on. But it's nice to read this, and not because it moves Frum modestly in the direction of my own worldview. It's nice to read it because it's such an unusual concession to reality. The financial crisis of 2008 was a stupendous event, and it's frankly stunning to me how few people seem to have responded to it in any substantive way. Occasional throat clearing aside, it's been business as usual for a huge chunk of the political, business, and pundit class, especially on the right.

I just don't get that. The Great Collapse was a big enough, and unexpected enough, event that it should have changed your mind at least a little bit about something. If it didn't, you either have godlike powers of prognostication or else you've simply decided not to let real world events ever affect your worldview. I'm willing to put money on the latter.

http://motherjones.com/kevin-drum/2011/04/great-collapse-and-you

[MedleyMisty]

1. Not unexpected for those of us who live in reality

But hey. Reality is the lunatic fringe when your whole society has gone insane.

[freshwest]

2. K & R

[pretzel4gore]

3. frum's an Israeli activist, mainly

following WW2, and the entrenchment of fascism in west 'democracies' (see dulles brothers, hoover, walker/bush klan etc) under guise of 'conservativism' i think Jewish observers thought they better join the forces of reaction to try direct racist hatred away from them and towards poor/black/young/socialist and so on...David certainly isn't a racist, nor is he overly foolish as to believe the hateright can be trusted, but....lookit how well it's worked out for the 'neocons' . I've always loved Israel, since reading 'House on Garibaldi Street' as a kid but was startled to see Israel advise the death squads in Latin America and help white racist S Africa develop nuke bombs, back in 70/80's...the saintly Che once said 'Never attribute stupidity to guys ALOT smarter then we' (he was referring to Brit/US imperialists in 3rd world) and that goes double for the likes of chucky krauthammer/dan pipes/rich perle/frum/and the gang at NYTimes etc. They hate the fascist as much as we do, but they DON'T TRUST US, so ...well, you get the pic

[ixion]

4. The Great Collapse was easy to see coming...

in fact, I remember remarking to a real estate agent in 2005 that Real Estate was wildly over-heated, and when the bubble burst it wasn't going to be like the dot com bubble, it was going to be ugly because it was a core commodity.

In 2007 when Bear Stearns went down, I pulled my money out of the stock market. It was easy to see that something bad was coming. Easy. And any economist who didn't see it coming, any pundit, or financier, should be out of a job permanently, at best.

[Aerows]

5. All of that sounds good, but it misses the true problem

1). Too many wars 2). Too many tax breaks for the wealthy 3.) Too many corporations not paying taxes

And yes, the bailouts and the continuing rip-off of the American people via the foreclosures that aren't even legal. What's going to happen is that the economy will eventually rebound, and people will be slaves to rent. That's pretty much the entire idea behind it all.