Schadenfreude

I liked the three stooges as a kid. My favorite was Shemp, a stooge in perpetual pain inflicted by Moe and Larry. Shemp is the U.S. financial market today...and I revel in the schadenfreude.

Honestly, a depression in this country would likely do it good. Just as now with this bailout, there would be a few winners and a whole lot of losers. But instead of a bailout intended to directly assist a few winners, a depression would (eventually) assist all the losers.

In this era of globalization, all classes in this nation have been able to enjoy stuffing their over sized homes to the rafters with consumer goods without having to pay what it would cost to hire Merikans to make them. The consequence of this monty is that we no longer have well paying manufacturing jobs. The only jobs available for the bottom two-thirds are strip retail associates, processed food handlers and sheetrockers. We also carry of a mountain of debt, public and private.

I'll argue that this debt will never be paid. We will either default on this debt or we'll hyper-inflate our currency. As we aren't allowing the big banks to fail, we are in essence allowing these banks to default on their debt. We are soon to add another $700,000,000,000 to our debt here in another week or two. Seven hundred thousand million...interest rates are quite low, the equities markets are quite happy...everything is bright and beautiful...until this morning when the bailout wasn't approved. Markets were sharply down on the news that they'd have to wait a little while longer to pop their champagne corks.

So when the U.S. defaults on its debt or hyper-inflates its currency, this will unravel the global marketplace. In my opinion, we have only these two choices to pay off our unpayable debt. The unraveling of our transitory globalization experiment will mean we'll return to an economy where goods and services are produced here...and the rebuilding of our domestic manufacturing will follow. This is why I think a depression would (eventually) assist all the losers.