by Jordan St. Claire

Created on: April 15, 2008

Reading newspapers and watching Television News you would think the economy is going bankrupt. It is the age-old maxim that if it bleeds it leads and hubris is good for news. Bad for the economy and consumers' collective psyche but people are buying papers. The same commerce continues just bad investments are getting destroyed, and inflation is only rising due to oil prices. The U.S. dollar is primarily weak due to speculation and China's refusal to devalue its currency in the market. China is one about to experience hell with their fixed rate currency. Japan's housing market is still recovering from the disaster in the 1980s. The EU, with unemployment rates of 8-10percent, is worse off. Our unemployment rate is only about 5.6 percent.

So, if the economy contracts .01 percent that means the same commerce happening a year ago is about the same. There is just no growth. The news media has pushed the panic button not the economy. If you want to see a bad economy, check out the Carter Years of 1976-1980. Home loans were about 20 percent but only 6.9 percent today. Home sales jumped in March 3 percent so that slump is turning around slowly. Banks just aren't loaning money to the people that want homes that can't afford them.

The first person to blame: Former Fed Chairman Alan Greenspan (who singlehandedly caused a recession in 1992-1993 by raising rates 6 times in a year). Greenspan, after he left office, is now taking the fire from critics he should have been taking all along. Inflation was 1% and he worried about it endlessly rather than the entire economy.

The second bunch to blame is: Crooked home buyers, their mortgage companies (100 have went bankrupt), and lax regulation of complex investments. Now, Wall Street firms unloading those securities back by fraudulent mortgages are getting sued because they let big investors cash out in 2007 and sold them as near CD quality to ordinary investors. That is securities fraud and they should go to jail. Countrywide Financial, probably the biggest offender, should be the first to go down. The FBI is now investigating lots of people.

The last bunch to blame: auditors and lawyers in the mess. The FBI is investigating. Due diligence was the last thing on their minds. They both exhibited a Alfred E. Neuman thought, "What, me worry?" When a lot get indicted, they will worry.

Housing speculation can be blamed really only on the people that got into it late.

The same thing happened during the Internet boom. Idiots with no business

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