Saturday, November 22, 2008

Someone at Wells Fargo gets it..

From the latest edition of Wells Fargo Financial Market Strategies newsletter:


For a year and a half, the U.S. Federal Reserve, the U.S. Treasury, the FDIC, the White House, Congress, etc., have been immersed (and almost obsessed!) with a push to prevent home prices from dropping, and my question all along has been the same: Why? If everybody agrees, and today nobody can deny it, that the U.S. suffered a home price bubble, then what is the problem with allowing home prices to drop? If home prices are "bubblish," why not allow them to drop to more reasonable levels? The more we do to prevent home prices from dropping the longer this crisis will last.

While this has been on and failed, monetary and fiscal policymakers have forgotten a very important fact: it is employment that will keep this economy from following a "debt-deflation" spiral (see below). Thus, the conclusion is that the U.S. government, in full force, should be trying to put a floor under employment destruction rather than under home price destruction. At this time, nothing should be off the table for fiscal policymakers, because the consequences of a debt-deflation spiral could be worse than any fiscal deficit created by a strong stimulus package. The plan should be two tiered: one, a medium- and long-term infrastructure investment and two, a
short-term jobs/work program that would include education subsidies for retraining of displaced workers.

1 comment:

Noz said...

The answers are in front of us....yet these morons can't see it or they are simply too greedy to care.

If we want jobs in this country, we have them...loads of them.

We have such a huge environmental crisis on our hands that if all the workers in the automotive industry changed jobs and began working in environmentally oriented jobs, it'd still not be enough.

We need a new fuel/alternative energy infrastructure. Well...START FREAKING BUILDING ONE.

We need to clean up our environment by reducing waste, removing pollutants and garbage from the landscape...WELL....START THE FREAKING CLEANUP.

We need new wind, solar, geothermal facilities...START MAKING THEM.

I mean..what are these morons waiting for?

If I were an automaker, I'd DEMAND to be re-trained and would begin working in the green industry.

That's how we create jobs. Throwing money at these stupid, corrupt corporations is being done for one reason and only one reason...to keep that cash cow and corruption going. Be damned with the environment, the people it'll displace in the long run, and the overall economy it damages.

I am so sick of the stupidity of these people that I can't come up with any more words.