Capital, It Fails Us Now

Jesse Walker | July 16, 2008

The Onion steps up its economics coverage:

A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.

"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution."...

Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act, which would order the Federal Reserve to begin encouraging massive private investment in some fantastical financial scheme in order to get the nation's false economy back on track.

Current bubbles being considered include the handheld electronics bubble, the undersea-mining-rights bubble, and the decorative-office-plant bubble. Additional options include speculative trading in fairy dust—which lobbyists point out has the advantage of being an entirely imaginary commodity to begin with—and a bubble based around a hypothetical, to-be-determined product called "widgets."

The most support thus far has gone toward the so-called paper bubble. In this appealing scenario, various privately issued pieces of paper, backed by government tax incentives but entirely worthless, would temporarily be given grossly inflated artificial values and sold to unsuspecting stockholders by greedy and unscrupulous entrepreneurs....

Whole thing here.

Comments

dave|7.16.08 @ 5:58PM|#

What's really scary is that it wasn't until the "fairy dust" bit that I thought it was a joke, and looked back to see the Onion reference.

Damn.

|7.16.08 @ 6:02PM|#

This is good stuff.

But the Bushpigs miscalculated the "duration" of their bubble.

In 2003, the Fed funds rate went down to 1.0% and regulations on buyer creditworthiness went "whooosh" - down the Libertarian memory hole!

Thus - the Sub-prime "bubble"! - it just popped a few months early!

|7.16.08 @ 6:05PM|#

That's not funny

Jerry|7.16.08 @ 6:09PM|#

It's funny because it's true.

|7.16.08 @ 6:10PM|#

Forget the privately issued worthless paper.

We already have "various government issued pieces of paper, backed by government taxes but entirely worthless, .... temporarily ... given grossly inflated artificial values".

|7.16.08 @ 6:17PM|#

You know, when the Onion can deliver such savagely accurate economic satire and so many people recognize its truth enough to laugh at it, I have to wonder how it is that we keep falling for government's money scams. Lucy always pulls the football away at the last second, and Charlie Brown, against his better judgment, is always willing to give her the benefit of the doubt next time. Are we the Charlie Brown society? Good grief!

SIV|7.16.08 @ 6:48PM|#

No video to go with the Gang of Four headline reference?

Naga Sadow|7.16.08 @ 6:52PM|#

I'm investing in snake oil. Sounds ludicrous . . . until the congressional hearing on why it isn't being used as an oil alternative. Then . . . ka-ching!!!

§|7.16.08 @ 6:55PM|#

No video...?

Watch old reds on the 14-inch screen...

|7.16.08 @ 7:15PM|#

Oh no!

I left it in my other suit!

Cool Cal|7.16.08 @ 7:34PM|#

Am I the only one who thinks that this article is immature in its "speculation is the root of all evil and woes" tilt? Come on ... The Onion has become the print equivalent of The Daily Show.

|7.16.08 @ 7:54PM|#

This is getting scary. Next thing you know some wild-eyed, crazy ass politician will be calling for a return to the Gold Standard.

stephen the goldberger|7.16.08 @ 8:19PM|#

Am I the only one who thinks that this article is immature in its "speculation is the root of all evil and woes" tilt? Come on ... The Onion has become the print equivalent of The Daily Show.

I don't think the point of the article is speculation is bad, I think the point is that speculation can yield poor returns, and much of the rejoicing over investment that has taken place over the past few years has been misplaced since we have not discovered the fruits of our labor (and money.)

Just being happy about capital being thrown around like politicians have been for a while now is stupid if that money is being thrown down the toilet and resulting in nonexistant economic growth. Its essentially attacking politicians when they argue that recessions are "entirely psychological" that the problem isn't that there aren't any smart investment opportunities around but that people are afraid. Something must be done to assuage those fears even if it means encouraging everyone to invest in something entirely wasteful.

Eric Haskell|7.16.08 @ 8:37PM|#

While reading that, I went back and forth between wanting to laugh and feeling sick to my stomach at how true it is.

|7.16.08 @ 8:43PM|#

"Investing" has no relation to reading financial statements these days.

It means getting in on the current bubble before it deflates.

Robert Enders|7.16.08 @ 8:56PM|#

Speculators provide a service. Let's say I have a supply of a commodity, and I need cash. Let's say the commodity is some vacant lots in Detroit. I talk to several developers and none of them are interested. Maybe they'll need it in five years, maybe they won't. But I need money now. Finally a speculators makes me an offer, and I take it. If the developers decide to buy later on, he gets rich off the deal. If they don't, he loses out. So that speculator is taking a risk that I am either unwilling or unable to take, just like an insurance company would.

|7.16.08 @ 9:28PM|#

What America needs right now is to get Dictator Bush and his "Regime" out of the White House and put a BUSINESS person in charge of this country. If politics were run like a BUSINESS things might just get back to normal. Enough of the self serving, corrupt politicians.

JT
http://www.FIreMe.To/udi

|7.16.08 @ 9:40PM|#

What if the congress critters don't get the joke? Anyone want to bet against something this crazy getting a hearing in some committee?

|7.16.08 @ 10:19PM|#

"Investing" has no relation to reading financial statements these days.

It means getting in on the current bubble before it deflates.

pssst, Ronnie Wood, I have four words for you...

[furtive glances, left and right]

High Fructose Corn Syrup.

You'll thank me later. Really.

TallDave|7.17.08 @ 2:09AM|#

This just goes to show capitalism doesn't work. Clearly, the government should make all economic decisions.

If only someone had tried that, it would have been utopia.

|7.17.08 @ 3:08AM|#

Thought I'd check in at H&R for a moment to escape the New Yorker cover uproar, and WTF the virus has hit here too.

|7.17.08 @ 7:51AM|#

We already have "various government issued pieces of paper, backed by government taxes but entirely worthless, .... temporarily ... given grossly inflated artificial values".

You're absolutely correct. If you're tired of holding those worthless pieces of paper, I'll take them off your hands for you. No really, just send them right along - I don't mind.

Robert Enders|7.17.08 @ 10:28AM|#

"put a BUSINESS person in charge of this country."

Dick Cheney is a business person.

CosmotarianUnderlord|7.17.08 @ 2:24PM|#

Obviously, the Onion is run by a bunch of racist Axiomatic-Anarchist-worshipping hayseeds. Thats not the kind of thing us responsible pragmatic libertarians should be condoning.

I mean, they seem to be proponents of Austrian Business Cycle Theory, and we all know that that is just "code" for wanting to bring back slavery.

st4rbux|7.19.08 @ 1:24PM|#

how about this: the next bubble is already underway -- it's the alternative energy bubble. Gore and T.Boone will help push things past a tipping point, there will be massive direct federal investment and regulations forcing private investment, then in 10 years when all the climate data demonstrates that alternative energy isn't really helping with global warming (or that AGW was a flawed theory to start with) people will revert from the more-expensive alt-energy back to cheap carbon-based energy, and the bubble will burst.

and of course, Gore and T. Boone are positioned to gain the most from this bubble;