http://www.npr.org/templates/story/story.php?storyId=97022523
Uncertainty Is Key To Consumer Credit Crunch by Russell Roberts "....But we're also going to wait and see what the government's going to do next. Nobody knows, and that evidently includes the Secretary of the Treasury. When no one knows how the rules of the game are going to change—and they seem to change from week to week—who wants to take a risk? Who wants to borrow money? Who wants to invest? Business and consumers are hunkering down, waiting for the storm of change to pass. The problem isn't liquidity. It's uncertainty. Paulson doesn't realize that his erratic attempts at creating liquidity are creating the uncertainty that makes liquidity meaningless. And his erratic moves elsewhere just add to the uncertainty. A few days ago, he announced that he was "exploring strategies" to use the TARP for "foreclosure mitigation." Then came the news that, no, the FDIC would have to go it alone in helping mortgage workouts. No TARP for them. I guess he's done exploring. At least until tomorrow. As the TARP spreads, the cost will keep rising. Remember the talk about how the government might even profit from its $700 billion "investment?" Insert hollow laugh here. I'd feel better if the money spent so far was helping. But there's no evidence that it is achieving what Paulson intends. And who's going to pay for all of this? Those who lived within their means, who went with the smaller house, who waited a few more years to get that new car, who took a part time job rather than borrowing even more money to pay for college. Suckers. You missed out on the thrills and now you're going to be paying the bills. The prudent will be paying for the imprudent for a long time. The great economist, F.A. Hayek, wrote that "the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." With each improvisation, Secretary Paulson is proving how little he knows about what he imagines he can design." _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
