Mendicancy

One of Our Leaders' former Treasury secretaries opines or, rather, still spews lies and just plain crap (my comments are interspersed in italics):

The American economy is now threatened by two different but interrelated problems. The first is the declining value of housing, and the second is the seizing up of the credit markets. Together, they pose the risk of a serious economic downturn; some even predict recession.

Isn't a serious downturn a recession? Is there an observable difference?

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What brought about the current situation? The accumulation in recent years of large pools of excess savings around the globe -- particularly in Asia and the Middle East -- drove interest rates down, making borrowing cheaper. As a result, the world went on a borrowing and buying binge. With cheap money in hand, asset values were bid up, especially for housing. And at the same time interest rates declined, savers began to search for ever higher yields.

Yeah, Goddam foreigners are all to blame. Not, oh, excess funds for speculating here in America, or lying, thieving, greedy lenders abusing ignorant borrowers. No. Foreigners with money. (Whose purchase of T-bills has, well, saved this country's ass financially and, in part, enabled Our Leaders' reckless spending.)

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We see complementary adjustments in credit markets. Values for asset-backed debt instruments are going down, reflecting the declining prices of the collateral behind those instruments. Risk is being repriced to more realistic levels, spreads have widened and credit has become exceedingly tight.

Some of this is called for and overdue. However, I'm concerned that the pendulum has swung too far the other way, and that today even good credit risks are being frozen out. Credit markets simply are not working well, as evidenced by the widening spread between the London interbank offered rate and the fed-funds rate.

This is a scoop: this is the first I've heard of any significant freezing out of good credit risks. And why should there be? There's still loads of loose cash and rates have been kept reasonably low. Or, simply, what the fuck is this guy talking about?

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Today, when considering possible responses, the first priority should be to avoid harm. The temptation to try to prop up the economy through dubious spending schemes must be avoided. And with the economy today so fragile, we must avoid increasing taxes for the foreseeable future by rolling back the 2001-2003 tax reductions, especially on the very lending and capital-formation processes that are still frozen. While monetary and fiscal policies are needed to reduce the fallout, they don't get at the root causes of the problem.

Never, ever, rollback a tax cut no matter how reckless, improper, harmful it may be because it is always good for the elite and that, not the well-being of our nation, is what matters.

And there's a lot more....