Oh, communists. Starting a diatribe off with a reference to Noam Chomsky at this point is a bit of a warning sign even if I agree with the reference used. Just as there is a tendency by radical leftists to believe that Obama's election means something that it does not in regard to the influence of their ideas in the world, there is also a tendency by the same to believe that the global economic crisis means something that it does not in terms of the repudiation of the ideas they hate. Deeply infuriating is this question: Which ‘flaw’ of the system as such opens up the possibility for such crises and collapses?
...when juxtaposed against the earlier hand wringing about the bailout. The purpose of the bailout is to tender the rough edges of the economic cycle. Communist systems do not have such cycles because the financial system is defacto nationalized. In effect, communism is all bailout, all the time. Comparing the amount of this bailout versus money we could be spending on feeding people in Africa is hardly a criticism when you are simultaneously arguing in favor of an economic system which has, as its central feature, a drag which vastly exceeds the sum of this bailout and is a constant reality and not just a temporary response to a temporary situation! Nevertheless, I bothered to waste time this morning responding because I thought that this observation was valuable: The first thing to bear in mind here is that the origin of the crisis is a ‘benevolent’ one: after the dotcom bubble burst in 2001, the decision reached across party lines was to facilitate real estate investments in order to keep the economy going and prevent recession – today’s meltdown is the price for the US having avoided a recession seven years ago.
It seems to me that something, and I don't know what, happened around 1995 that vastly increased the rate of investment in the stock market. I'd really like to know exactly what that was. At the time I thought it was excitement about developments in IT coupled with the impending millenium's effect on people's psychology. But I suspect there may be a more structural reason... some fundamental change made by the Republican Congress at the time? In any event, the run up to 1999 was comparable in scale to the run up to 1929, and the crash would have been devastating. I think the housing bubble was intentionally blown to soften the crash. We've essentially been having an economic depression for 8 years, but it hasn't felt like it, because we've been running a bubble. I can't really say that I can complain about that. Its not a bad idea. I also think it was allowed to get too big, likely politicians were afraid to act to stop it because they knew they would be held responsible for the resulting crash. The longer the ruse could be kept up, the better the Republican's fortunes at the ballot box would be. The gig is now, certainly, up. I don't think the iTulip guys have it right. I don't think we're going to blow another bubble. I certainly don't think this country is going to go rogue and blow a military spending bubble, as suggested by the linked author. The fortunate thing about America's political system is that the socialists and the nationalists are kept at opposite ends of the spectrum; this tends to limit the influence of nationalists during hard economic times. I think we're going to take it in the chin for about 8 years, and that it will be about 8 years before the economy is really growing again. There is not much that can be done about that. However, it would be useful to know exactly what happened in 1995. It would be useful to know if there was anything that could have been done about it. RE: Use Your Illusions | 
