Tulipmania

It has been said that an economist is an expert who will know tomorrow why the things he predicted yesterday did not come true today. The adage came to me today as I reflected on comments I heard this past Saturday that the credit market would dry up by today.

Tulipmania was the name given for a craze that occurred in Holland in the 1630s when gobs and gobs of people -- rich and poor alike -- wanted to get in on the act of making profits off the flower. They bought tulips and took advantage of an irrational exuberance for the dainty flower. Certain colors fetched more money and before too long, no one wanted to buy the flowers at the going rate. The Netherlands government was called up to bail out the buyers and nothing worked until the speculative bubble burst and people lost interest. Anyone remember the Pets DOT COM stuff of the late 1990s.

Today's financial crisis is about the credit market rather than tulips. This issue has been an elusive beast for me to grapple with. Until, I cam across this gem. This article makes things a lot more clear. It is very well done and brings the rest of the world up to speed on this crisis. It comes from two writers at McClatchey news service's DC bureau.

By the way, these guys spend a lot of time answering questions from plain old readers about the shaky economy, which I must say is a great service. Reporters Tony Hall and David Pugh are taking their profession to a higher level and that is a good development.

Bailin' Out the Street

The House today rejected, by a vote of 228 to 205, the $700 billion bailout for Wall Street. It saves at least until Thursday the translocation of America's financial capitol to the 202.

The Dow Jones Industrial Average fell 778 points, or 6.98 percent to 10,365, the biggest point drop ever. The Standard & Poor's 500 Index fell 8.4 percent, the most since Oct. 26, 1987.

Ah yes, October and Markets. Could we be in the midst of the Panic of 2008? I have no idea. My degree is in politics and history, not economics or business.

What I would like to see is the democratization of Wall Street. Does the Treasury have to be run by Wall Street. The Real Question is this: Is What is Good for Wall Street, Good for America? I for one tire of Goldman Sachs running the financial show. We talk about changing Washington by swapping Presidents from one party or another. Can we end this faux public service factory from Manhattan-based investment banks and have a banker from Los Angeles or San Francisco in charge for a change. Or perhaps let's appoint some exec from Omaha or even a state controller, or how about a CFO from progressive company.