A Clueless Economy

Why does Congress vote no on a bill to rescue Wall Street, then turn around, and vote yes? Why does Lehman Brothers get tossed overboard while other financial firms get rescued by the U.S. government? It's really not absurd to say that there was a failure, and it is easy to assume that failure is always due to someone abusing the system. Bob Moon, stated on National Public Radio's Marketplace, stated that American's have lost well over a trillion dollars in retirement funds since the Wall Street fallout bail out. Now there has been this huge amount of lending over the past decade, so much lending that banks, and financial firms were giving out endless amounts of credit without any sound collateral, and by overlooking the risks of loaning to unchecked borrowers. These financial firms were giving out money like it was going out of style, and now they've been bailed out by the government, and at the same time are locking up the credit and the flow of money. Moon, even went onto say by "painting a word picture" for the listeners, that "the fire hose is going, it is just gushing out money right now, to make sure there is an adequate money supply around the world. What's happening is, it's going directly into the coffers of those banks (ones that survived the financial fall out), and they are drinking it all up." Thus the banks are reluctant to distribute any of the money that is amply available to them.

So today we have market analysts, the Fed, and Wall Street all scratching their heads, wondering why this is occurring. Simply put, the money is not there. The consumer is tapped out. They can't turn to credit because it's been all frozen up. They cannot turn to cash, because it's being heavily absorbed by banks and any other lenders. It's like the parents asking their children why they are not eating dinner, yet there's no food on the table.

Most analysts at this point are blaming confidence, and that's apparent, in that financial confidence deems monetary assets, and we have financial firms with more debt than assets, and consumers tightening their spending, and at the same time losing future assets through investments, and retirement funds. If Wall Street wants to blame confidence, that's fine, but it should be secondary to the blame pointed at itself for absorbing all the cash. If the banks can look at its own low confidence levels, then they would relinquish the cash, and maybe things could get back to normal. These financial giants got there bail outs, so they should quit their collective wining, and be more responsible with value in the market.

Come on, really, either we have a monetary system or we don't, but give us something here!