A year ago this month, the whole country was in agreement that we had been living an illusion for the previous ten years and that the prosperity we thought we were enjoying was not sustainable. There was no dissent on this point. Even Obama admitted it. Today, the illusion is even more egregious than it was, and yet people are once again embracing it as if it will not end.
The policy response to the downturn has been one of the most short-sighted and economically irrational in the entire history of mankind. Why did they do it? It’s all about the politics of the short term. The entire economic structure has been phonied up in order to make a success of the Obama cult. This is the driving motivation, alongside the obvious desire on the part of financial and banking bigshots for a bailout.
~ Lew Rockwell, “The Great Fakeroo Recover,” LewRockwell.com, September 9, 2009
Comment: As my partner, Bill Laggner, wrote recently, “Everyone sits at the bailout trough in American finance.” 90% of the investment industry is still living in the delusional world of 1982-2007 in which every downturn was arrested by Fed intervention, markets quickly recovered to new heights, and second-guessing the financial meddlers meant career suicide. An inflection point has been reached. The rules have changed. Economic gravity has reasserted itself.