Skip to content | Skip to menu | Skip to search

Banbury Cross

a pillow for lost thoughts...

Post details: Unreasonably Cheerful Vultures

Unreasonably Cheerful Vultures

If I hear the phrase "get the credit flowing" again, I think I am going to give my porcelain throne a hearty hug. Just about anybody and their dog agrees that cheap credit and irresponsible lending lead us into this mess, so how can the encore possibly get us out of it?

I wonder how often they call for increased "flowing" at the meetings of Alcoholics Anonymous. We are like a barely rehabilitated slot machine addict who is lobbying the City Council for the new Casino. Like a bulging alumnus of McDonalds who makes a beeline for the triple burger the moment he is let out of the gates of a Diet Camp. "Oh yeah, we need to get those calories flowing again". In many regards credit is similar to calories, indeed. We need both of them in healthy doses. But we don't need to get them "flowing" again. Rather, we need to watch them. Very carefully.

Neither do we need to prop up the banking system. We need to scrap it and build a new one. From the scratch. The whole underlying culture must change if we are to avoid a financial heart attack. Sure, credit is great, especially for bankers who make cool profit from its creation, but you cannot borrow your way to prosperity. Running humongous deficits is an insidious form of taxation, since the decreased buying power of the debased currency will be felt for generations. Instead of rekindling the credit fire, we'd be better off living within our means and focusing on energy, education, transportation and developing cutting edge technologies. We need to leverage our superior University System, not the balance sheet of Goldman Sachs.

65 million years ago, an asteroid slammed into the Yucatan peninsula and the resulting climactic changes wiped out the whole Dinosaur population. Few months ago, it seemed that Wall Street behemoths were facing similar fate. After the subprime asteroid hit the underbelly of their balance sheets, many of the corporate dinosaurs have been lurching on the verge of extinction, some falling to the ground with their stubby legs up.

But I am afraid Obama may have just squandered a great chance to rid the system of the corrupt and greedy cabal - of the financial predators who love to gamble with other people's money. He could have said good bye to geniuses whose over-reliance on linear models and just plain unfettered greed created this catastrophe. But instead he is inviting various seedy characters back to the table. And the vultures of hedge funds are getting ready for the banquet of their life. There are plenty of carcasses in the housing and banking industries to munch on and should a bone get stuck in their fine throats - no worries - the sumptuous junket will be waited on attentively by wretched US taxpayers. And their children.

Bon appetite.



No Comments for this post yet...

Comments are closed for this post.

This site works better with web standards! Original skin design courtesy of Tristan NITOT.