Es Viva Andrew Mellon

Over the last twenty years, Japan freely lent 10 Trillion dollars to the west -- this money went for bad real estate loans in the US, four store hotels in second world backwaters, coffee shops in iceland, and other terrible places where it is now worth dimes on the original dollars.

Nobody knows the extent of "rot" in the international financial system, but I would gently suggest that, as a matter of world history, the 10T number is probably a good start -- and that means that, if the goal of bailouts is to preserve the current system by having national governments make the banks whole, we are only about twenty per cent done. And then what do we have? We have a moribund financial system, and Americans get to spend the next twenty years paying for the crap that was bought in the previous twenty -- it is like socialism, except that people are subsidizing the Japanese rather than themselves.

When European and American governments are "saving" individual banks, the deeper fact is that we are only about ten per cent of the way done with repaying the trade imbalance.

So what is the right economic plan?

1. Moderate inflation
2. Expand the safety net
3. Let the current financial/corporate system collapse and allow the shards get caught in the safety net, and watch new and wonderful systems emerge. For example, if a team from a bankrupted automotive company has a smart idea, use the money that could have been spent keeping the automotive company alive to fund their lightweight enterprise.

Megacorporations are the evolutionary equivalent of dinosaurs -- large collections of dna that need size in order to compete with one another: in the future a swarming collection of smaller organisms will lead to greater efficiencies than hulking monstrosities. Government intervention to preserve these joyless monoliths is like enslaving the egg-stealing mammals in the service of their cold-blooded predecessors.

How is that Democrats have a reputation as biological evolutionists but economic theocrats?