This is EXACTLY How I Feel

This morning, Krugman was talking about the inflation fear-mongering. I agree with him in that if there is going to be ANY inflation, it will only come about as a result of deficit spending at the federal level. But the banks are hoarding more than what Obama is doing in additional spending. So the hoarding negates any inflationary effect that the spending may have had. Where I disagree with Krugman is in his assertion that more government spending is going to "rescue" the American economy. The hoarding door can swing both ways and bank hoarding can also keep any positive effects from occurring. But eventually, unless we plan on making such expenditures a permanent feature of the economy, we simply MUST address the underlying issue...stagnant wages.

Either wages must come up or prices must come down. Conservatives want to give us lending and credit to make up for the difference between wages and prices and "liberals," or what I like to call neo-liberals, want to avoid the wage issue too and give us government spending. Where do they think the tax money comes from to pay for all of this spending? Doesn't it come from.... wages?

But I don't see wages going up any time soon...except maybe for the rich. No, the only thing I see are falling prices. There's no other way out but to deflate this overly-inflated economy. Home prices, car prices, college costs, luxury items at the mall...everything that was being purchased on time before this mess began must come down.

Paul Krugman Expresses My Opinion....somewhat

This Krugman article expresses my opinion very well, especially when it comes to the current fear-mongering over inflation. But instead of addressing the root cause, stagnant wages, he seems to imply that government spending can "rescue" us from flat income. Unless "liberals" plan on making these expenditures permanent, something MUST be done about stagnant wages.

Conservatives push credit in order to make up for stagnant wages and "liberals" push government spending--spending derived from tax money that is taken from, you guessed it...wages.

This is about wages. Period. Either prices have to come down or wages have to go up. Bottom line.

A Little Deeper

People seem convinced that a recovery is going to occur this year. But what is at the bottom of this assumption? The only bit of good news has been the stimulus package and we already know that the banks are hoarding about the same amount of money, so whatever effect that the stimulus could have will be canceled out by the hoarding of the banks.

Then, after the economy continues to weaken, they'll start to come to the realization that the problem is a little deeper than just frozen credit markets.

Gas Prices Rise Even While Demand Remains Weak

TIME - Storage tankers across the globe may be brimming with oil that no one is buying because of the global economic downturn, but the traditional laws of supply and demand don't always apply to oil prices. Drivers have faced rising prices at the gas pump in recent months, as investors and oil-producing countries hoard supplies in anticipation of a global economic recovery later this year.

GDP Falls By 5.7% in the First Quarter

WASHINGTON – The economy sank at a 5.7 percent pace in the first quarter as the brute force of the recession carried over into this year. However, many analysts believe activity isn't shrinking nearly as much now as the downturn flashes signs of letting up.

They're Even Trying To Undo Geithner's Latest Proposals!

(Reuters) - A group of banks and money managers plan to release a letter to the Federal Reserve Bank of New York and other U.S. and overseas regulators to help fend off some rules proposed by the Obama administration that seek to control trading in the derivatives market, the Wall Street Journal reported.

PPIP is Less Appealing to the Banks Now

But prospective buyers and sellers have expressed reluctance to the FDIC about participating for fear the program's rules will change in a political atmosphere hostile to Wall Street. In addition, some banks that might have sold troubled loans into the program earlier in the year have become less eager as they regained a sense of stability.

This is exactly why I didn't like the idea of giving money to the banks anyway. Not only do they appear to be ungrateful, but they're convinced that the worst is over.

It's only just beginning.