On the one hand, the stock market continues
to climb against all odds….on the other hand, record numbers of
Americans are bankrupt, in foreclosure, receiving food stamps, or all
Will we some day see soup lines forming under a "Dow 20,000" banner, as some have waggishly suggested?
That day is getting closer and closer, according to all the data I am finding.
This article, found in a UK paper of course,
reveals some grim statistics that conform better with a country already
in recession and facing high inflation than they do with a still
positively expanding GDP and low inflation.
Dismal projections by the Congressional Budget Office in Washington
suggest that in the fiscal year starting in October, 28 million people
in the US will be using government food stamps to buy essential
groceries, the highest level since the food assistance programme was
introduced in the 1960s.
Emblematic of the downturn until now has been the parades of houses
seized in foreclosure all across the country, and myriad families
separated from their homes. But now the crisis is starting to hit the
country in its gut. Getting food on the table is a challenge many
Americans are finding harder to meet. As a barometer of the country’s
economic health, food stamp usage may not be perfect, but can certainly
tell a story.
In some states, one in five people are
receiving food stamp assistance. Meanwhile, Wall Street is all happy
again, because the Federal Reserve has all but guaranteed every
possible future bailout, while Washington, DC, has agreed to bailout
the most heavily indebted Americans to the benefit of Wall Street and
the profligate and at the expense of everybody else.
The solution? It’s important to remember that the primary ‘problem’
facing us is that Wall Street cannot figure out who is going to take
the other side of the next $10 to $20 trillion of new borrowing that
will be required to keep this banking game going. Failing that, their
solution will be to assure that the inevitable losses are taken by
somebody besides themselves, and so far they are winning that game
At any rate, the only solution is to come to grips with the fact that
the party is over and the credit bubble has burst, and to let the bad
debts get wiped out so that we can get on with the rebuilding. The
sooner the better.
And yes, let the chips fall where they may. My strong preference would be for those who made the bad decisions to take their lumps.