Peter Krupa

I suspect that the government is, at this moment, screwing the pooch. Starting in November, the government sold the bank bailouts as a way to stave off a truly catastrophic economic tailspin. Just a little priming of the pump, a little life support. Fine.

But what I hear now – from everyone – is that we need to do everything we can to “get banks lending again” – as in, consumer lending – which is insane. That lending is precisely why we got into this crisis in the first place. For the last decade, Americans have been on a debt-fueled spending spree that is completely unsustainable. Borrowing does not create wealth. We need to pause to pay back our debts, and then start actually producing things to generate wealth.

Instead, the government is obsessed with cajoling you into taking out a mortgage, and banks into offering it to you. Great plan.

What’s worse, yesterday’s new plan seems intended to keep the real estate-backed asset bubble inflated by, basically, subsidizing shit, keeping the risk with the taxpayer, and handing the profit to private companies.

Of course the stock market rallied yesterday: We’re about to write those knuckle-heads another check for $1 trillion!

Why we don’t force some banks into bankruptcy, fire the management, restructure them, and sell off the pieces, rather than keep bailing out someone else’s leaky boat, is beyond me.

Have you stopped to ask yourself what the world is going to look like a few years from now? What with millions of people getting canned, stable employers no longer stable, the whole economy on fire. Imagine: General Electric just cut its dividend. GENERAL ELECTRIC. GE hasn’t done that since THE GREAT DEPRESSION.

How bad can it get? Let’s see. The last Great Depression culminated in global fascism, World War II, and the invention of the atom bomb.

Forget T-bills… I’m investing in Krugerrands and ammunition.

The Economist comes out in favor of legalizing drugs as “the least bad policy.” They make a very convincing case. Come on people: Prohibition doesn’t work. And we have better things on which to spend $40 billion a year.

I guess if you look at the facts, the reasoning is obvious. As The Economist puts it, the West’s war on drugs has lasted 100 years, and completely failed. Can’t we try something else? The hard part would be convincing unreasonable people – like Limbaugh Republicans who get extremely bent out of shape over cigarette smoking bans (it’s a free country!), yet rally around felony charges for the possession of minor quantities of marijuana.

Does this make sense? No.

It’ll be awhile before the topic of drug legalization is anything but political suicide in the U.S.