Tuesday, October 07, 2008

Let's sing a happy bailing song!

The Dow Jones Industrial Average is down 1000 points since the Congress rushed through its bailout and pork sandwich and President Bush signed it last week.

And I feel great.

No, I'm not celebrating the national angst -- though it's tempting -- or the $700 billion we flushed into the abyss. I'm just relieved there is general agreement we shouldn't print up another $700 billion to fix all our problems again. And the widespread angst will be hugely profitable once we get back to allowing that sort of thing around here.

Nevertheless, I find it necessary to correct some convenient re-writing of history about Herbert Hoover. He is cast, conveniently enough for those doing the casting, as a hard-hearted Republican free-marketeer who sat by and did nothing as the nation collapsed into the Great Depression.

This simply is not true.

In fact, I found this great quote from Hoover about his efforts to stave off disaster:
"We might have done nothing",Hoover said, "[but] we determined that we would not follow the advice of the bitter-end liquidationists."

I am the type of proud "bitter-end liquidationist" that neither Hoover nor Bush would allow to get in the way of all the inverventionist fun. Our problem now, as then, is excessive credit that has to be wrung out of the system. The sooner our politicians let that happen, the sooner the economy will get back to growing.

California's hints that they will need bailing out are just the tip of the iceberg that represents the states and cities that may keep the next president too occupied on that level to do much damage on a large scale for a while.

That and the inevitable firesale prices on assets all over the world for those of us who didn't wreck ourselves in the party, may make it all worthwhile fairly soon.