Let them rot
The markets are now panicking, and we are being told the end of ages are coming. And there’s some truth to that: if Congress holds firm on this and then goes on to write and pass a bill which takes care of Main Street rather than Wall Street, then the end of an age is indeed happening; since the financial sector had become so large, so parasitical on the real economy, the end of that age is going to hurt a ton. The US has spent decades offshoring and outsourcing jobs, not rebuilding infrastructure properly, ignoring education, not dealing with fundamental problems like energy supplies, letting its universities work for for short term corporate cash instead of long term gains, and so on. The real economy, in other words, has been under invested even as the financial economy has sucked up all the room. Financial companies promised 15% returns, normal companies were forced to try and do the same, but the reality is almost no company can deliver that without fraud, extremely risky business practices, or both.
As it happens those 15% returns were lies, they were not real. They were a result of fraud, leverage, booking future profits today and various accounting tricks. They sounded too good to be true and as with most such things, that’s because they weren’t true. They were lies. </em>
A must read: Paulson Bailout Failure: First Shot in the Next Class War
