"The wise guys on Wall Street invented a doomsday machine. We are not even clear who owns what"

[Better Believe It]

Surviving the Great Collapse
By Robert Kuttner
The Boston Globe
March 12, 2009
Robert Kuttner is co-editor of The American Prospect and author of "Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency."

THIS ECONOMIC CRISIS doesn't have to be a second Great Depression - if government does nearly everything right, and soon. But if government doesn't do more, and fast, this could be worse than the 1930s. Why? Three big reasons:

Finance: A Doomsday Machine.
The financial system is in far worse shape than it was when the stock market crashed in October 1929. In the 1920s, there was a stock market bubble, mainly because people could play the market "on margin," borrowing to invest in stocks. There were also scams like the original Mr. Ponzi's. Like in the present decade, the Federal Reserve helped to enable the game, with low interest rates and few rules.

But today, thanks to "securitization" of loans and the ability of insiders to create exotic and unfathomable financial instruments, the speculative system makes buying stocks on margin look like child's play. In the aftermath of the crash of 2008, the process of sorting it all out and getting banks functioning again is something that markets simply cannot do. We are not even clear who owns what. The wise guys on Wall Street invented a doomsday machine from which there is no market escape.

Wealth, Deficits, and Demand.
The economy now bears all the hallmarks of a depression. Between the housing collapse and the stock market crash, American households are out several trillion dollars (in the 1920s, there were no 401(k) plans and less than 2 percent of Americans owned stock).

A Debtor Nation.
America in 1929 was a major international creditor. Today, we are the world's biggest debtor. The financial bubble created the illusion of prosperity.

Can America recover from a Great Collapse? Can we avert a second Great Depression? To coin a phrase, yes we can. But we need the right strategies and we don't have much time.

Please read the complete article at:

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/03/12/surviving_the_great_collapse/

[MikeNearMcChord]

1. Send him in, he knows about Doomsday Machines.

[Sebastian Doyle]

2. There's no way I would ever send a Vulcan to Wall Street.

They couldn't understand a world so completely devoid of logic.

[jberryhill]

3. Good point

We need to send Captain Kirk in to seduce whatever female is in control of teh evil.

[MikeNearMcChord]

4. Actually I meant the guy on the right, Commander Decker.

Mea Culpa for not expanding on the photo.

[Better Believe It]

5. For Sunday DU'ers