Monthly Archives: October 2008

Restoring confidence in the credit system may prevent a cataclysmic meltdown in the U.S. economy, but it won’t fix the long-term decline based on fundamental ailments that the bubble-driven stock market and real estate booms of the past decade have simply deferred. Instead of manically watching the Dow yo-yo from day to day, we should simply recognize that it has been vastly overvalued for some time. Until such time as America’s economy (the real economy, not the fetish market of financial services) has been restored to some semblance of health — a generational project, unfortunately, given the devastation wrought by a generation of Reaganomics and, it must be said, by its “New Democrat” imitators — any dramatic recovery in the Dow will be brittle, based on false confidence or some new “bubble.”

…fixing America’s economy will require not only jettisoning the Reagan dogma of deregulation, shrinking government, and tax cuts as the cornucopia of economic growth, but also the Clinton legacy that turned the Democratic Party into as much of a friend to Wall Street as the Republicans had traditionally been. Wall Street is not the economy, and the last two decades have shown that the stock market can be hale and hearty even when the economy is being steadily denuded. It’s on fixing the real economy that voters should be forcing politicians to focus.
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