Tuesday, November 25, 2008

Zombie Economics: Don't Bail out the System that Gave Us SUVs and Strip Malls

By James Howard Kunstler, Kunstler.com
Posted on November 25, 2008, Printed on November 25, 2008
http://www.alternet.org/story/108481/

Though Citicorp is deemed too big to fail, it's hardly reassuring to know that it's been allowed to sink its fangs into the Mother Zombie that the U.S. Treasury has become and sucked out a multibillion dollar dose of embalming fluid so it can go on pretending to be a bank for a while longer.

I employ this somewhat clunky metaphor to point out that the U.S. government is no more solvent than the financial zombies it is keeping on walking-dead support. And so this serial mummery of weekend bailout schemes is as much of a fraud and a swindle as the algorithm-derived-securities shenanigans that induced the disease of bank zombification in the first place. The main question it raises is whether, eventually, the creation of evermore zombified U.S. dollars will exceed the amount of previously created U.S. dollars now vanishing into oblivion through compressive debt deflation.

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