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In a nutshell, the economy is tanking because of the speculative bubbles that have been allowed to run rampant with nary enough banking regulation for the past 30 years. We are mostly familiar with the Silicon Valley bubble that burst, and now the Housing Mortgage bubble has burst.
This non-regulatory environment is a product largely of Republican government processes. As is the redistribution of wealth over the same time period so that more concentration of money is in the hands of the least people since the 1900's.
That much money in the hands of people who don't need it floods the markets with speculative investments, going from one boom-town investment to the next, with no brakes by government regulators, and certainly not by the banking industry itself. This is a world-wide phenonmen, and not limited to the U.S.
But in the U.S., it is precisely the kind of economy the Republicans have pushed for, and now its pushed us over the edge into total economic meltdown.
Most Americans aren't paid enough to live the American Lifestyle, so everyone's gone deep into debt. All American institutions have done likewise, and our government - afraid to raise taxes - has followed suit. There's no money on earth to pay back all this debt, and the entire house of cards is starting to crumble.
The Fed Reserve Chairman says he will do everything in his power to prevent a Great Depression, but he may not have that power. Nonetheless, Wall Street has rallied a bit today on the leaked report that the government will continue to take over faililng businesses. Most of the major brokerage houses have already been bailed out/taken into conservatorship by the goverment. Insurance giant AIG followed earlier in the week, mortgage giants Fannie Mae and Freddie Mac were last week.
We the taxpayers are already on the hook for those bailouts to the tune of some 4 trillion dollars, but that's not yet necessarily money lost. Depends on what happens. But a total financial collapse of the world economy is looking more and more likely, in which case those "investments" or "meddling" by the U.S. government would be worthless and would be a total loss to taxpayers in addition to the millions of jobs that are going to be lost.
Meanwhile, $15 trillion in stock wealth has been lost since the beginning of the year, and that's the tip of the iceburg.
And if you think we have it bad here in the U.S., consider what rampant speculative investing has done to poorer parts of the world. Investments in commodities have driven food prices through the roof, and by year's end fully ONE BILLION PEOPLE will be classified as going hungry.
I say while we still have some discretionary income, we get out the tar and the feathers and the torches and the pitchforks. Half of us head to D.C. with the tar and feathers, the rest to Wall Street with the torches and pitchforks.
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