Reply #12: You should google it for details, but Sweden in the 90's nationalized its

[Nay]

banks and did various other things when its economy took a similar dive. The difference here is that there is a much more rapacious rich class, and a very weakened labor movement. Sweden, with a govt that already was used to evaluating actions based on how it would help the largest number of its citizens (rather than just the bigshots) were ahead of the game from the beginning.

Japan, in similar circumstances, had a 10-yr period of stagflation/deflation. I have no idea how they are doing now.

Here, unfortunately, economists are going around asking, "How can we get the consumer spending again? How can we raise consumers' confidence?" in one breath, and in the next breath they are saying everybody has to take pay cuts, the unions cost too much and have to go, no more overtime, don't count on full time pay, we're gonna do forced unpaid vacations, we have to cut retirees off, etc., etc. Why no one seems to see, or question, this crazy dichotomy is beyond me. The unwillingness to see reality is the major roadblock to any solutions to this mess.

Car sales are down 40% across the board, even among car companies not being bailed out. Why is that? Because citizens: have lost buying power through credit tightening; can't get home refis even if their home isn't losing value, and all homes are; are losing their jobs or taking cuts in pay or losing overtime; are losing benefits like 401K matches or health insurance, so their payck has to cover that too; have watched their 401Ks be decimated; have seen gas go to $4.50 a gallon; and are now watching rich guys GET AWAY WITH BILLIONS OF THEIR TAX MONEY after ruining everything they touched with toxic financial instruments. Would you go buy a car, or anything else you did not absolutely need, in an atmosphere like this? Of course not. No one would.

There are people who say that this sort of financial meltdown cannot be "fixed" in any way that will bring us back to business as usual. I am in that crowd. Google James Howard Kunstler (especially his "Clustefuck Nation" essays) for essays on that.