Naomi is right on target with the shock doctrine. Amazing book.
She explains a lot of what is going to happen if those in power get their way. The worst would be yet to come.
One thing to remember. They will try to make their "solution" seem very reasonable. All the talk about the bail out being inevitable, that we will collapse if we dont do it is PURE shock doctrine.
Another thing - the Repubs will blame the "greedy home owner" for buying too much. OK. So lets put this to rest.
1) First of all, when money is made available, it will be used. Thats how ANY economic system works. The big guys KNOW that so why is that even a surprise? Make no mistake: the billions of dollars available for those lending is what drove the behavior.
2) Second. Ok assume that it IS the greedy homeowner just for the sake of argument. The free market boys say the "market is supposed to regulate for the best of society". So in effect if their models are correct (they are not) then this SHOULDNT MATTER. But of course it does.
The take away here is the PROOF that deregulation and "un-frettered markets" do NOT WORK. That means you HAVE to regulate to prevent this type of problem. And why are we not hearing about more regulation? Yeah, there is some blather, but why not a demand?
The answer is because they have an almost religious belief in the teachings of Milton Friedman (read Naomis book). That the market is the only thing that matters. That is should be TOTALLY unregulated. They are not saying it, but Im sure there are many in deep power that want MORE DE-regulation. That is the central idea of the "shock" in that it needs to be allowed to wipe the slate clean with the power of the makets to regulate for the good of all (kinda like scrubbing bubbles?)
Where we need to go next is the debunking of the CORE tennents of Milton Friedmans economic theories. AND even the commonly held basis of accepted economic theory because they are MATHEMATICALLY PROVEN WRONG (not to mention real world).
The foundation for almost all of this is the belief that unregulated markets determine the best social conditions. This is a fervently held religious belief by most economists (both R and D which are both actually pretty "center" of thought).
There is interesting parallels in the medical, religious, etc fields about why people get "stuck" on certain ideas and stick with them, but suffice to say that a lot of good people REALLY think that they are doing the right thing (which of course makes them famously rich, but that is part of the reinforcing behavior).
But the dirty little secret is that it (free unregulated market) is fundamentally / mathematically ***wrong***. Even the most basic assumptions of the supply and demand curves are ***wrong***. If you took macro/micro economics in college you were basically taught that the sun went around the earth.
This **matters** because it forms the whole house of cards that ultimately says that the market is the best way to create social equality etc. Wrong.
Boring stuff next - but I find it fascinating. It's these tiny little premises, foundations that are used in EVERYTHING from trade, social programs, interest rate stuff, etc. And its wrong.... When you look at the level of math that was used to "prove" this stuff it is astoundingly bunk. It's basically graphical methods, superposition, etc. No dynamics, no higher order diff eq, not chaos, etc.
When any "higher" analysis is performed, it still uses the underlying flawed foundations.
http://www.debunking-economics.com/index.htm#Book%20structurehttp://www.debunking-economics.com/extracts.htm#2