can you believe this?

posted by Curt, on September 25, 2007 12:09 pm

Apparently, stocks are "edging up" today, despite the bad economic news, because Wall Street investors are betting that the bad economic news will spur the Federal Reserve to cut interest rates even more. You can read about it here.

I must admit, this all seems really remarkable to me. Either there is some real economic trouble ahead (for more than overextended home buyers and New York investors) or else there is an incredible sense of entitlement on Wall St. Both may be true. Still, I just can't help but think that the answer to this potential crisis lies in more of the same thing that created it.

I suppose I understand the argument that we need to soften the broader economic impact of the housing market crisis with easier credit, and that, as the housing market improves we gradually move interest rates upwards . . . such a strategy seems consistent with the Federal Reserve's rate decrease last week. But it appears as though Wall St. wants something more drastic, and I, for one, worry what that is going to do to the economy.

I'm certainly no economic expert, but even I can see and feel inflation and nervousness--and I'm seeing and feeling both. Now seems to me like a time to move away from the easy credit economy. Everyone acknowledges the problems it created, and yet, it seems like we don't know what else to do but continue down the same path. I'm beginning to think that it is going to take a major disruption to bring people back to sanity . . . 1929 level--I hope not, but I don't see it being any less than what happened during the restructuring of the 1970s.

Am I crazy? Maybe just overly pessimistic? Please let me know. I could use some optimism . . .

filed in other, Politics, and Economy

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