Shorn of the Dead Dollar
Posted by Dave Bath on 2009-05-22
With the so-called "Global Finance Crisis", what real value or utility of any asset has been lost, even though a significant portion of notional wealth has disappeared?
Rather than self-pitying moans about "lost" wealth, which are really moans about more realistic valuations, the moaners should be giving thanks for the dividends gained from the illusory wealth for so many years, including relatively greater power that notional wealth gave them over others, and with the resulting pecking order largely maintained by actions of governments to protect the guilty parties, guilty processes, and guilty philosophies.
The problem with governments propping up "zombie banks" by essentially underwriting toxic "assets" is that this doesn’t just keep the zombies walking, it keeps the zombies able to cause damage to others – sucking out dollars and economic muscle, and apparently sucking out the brains of electors (not that such brains would make a hearty meal!).
Unfortunately, while there is talk of "zombie banks", there is too little talk by political leaders that identifies the entire financial system not as a mob of zombies, but a nest of vampires that suck the life-force out of the real economy.
There is too little action, too late, to stop the derivatoma metastasizing into otherwise healthy sectors of society. Governments are merely avoiding body-wasting by feeding the cancer, rather than picking up the scalpel to take out that cancer and providing the anaesthetic of a decent social wage.
So… when will people realize that the correction – still incomplete – is unavoidable, necessary, and even a Good Thing?
When will we focus on the viable sectors of the economy, the opportunities for "creative destruction"?
When will we celebrate the correction, seeing that the dollars "lost" are illusory, and where they aren’t, they have been misallocated?
When will a politician with real power start talking about human outcomes and the utility of assets, and take the opportunity to fix the system so the economy cannot ever be warped into non-productive financial activity again?
Don’t hold your breath until political donations are outlawed.