Lunacy

Somewhere, I suspect a great failure of imagination is occurring.

Context:
The OECD and nearly every non-government expert is looking at the financial crisis and saying some variation of "this is gonna hurt for a long while." We don't know where the bottom is, but we do know we haven't hit it yet.

Situation:
We have governments the world over throwing money, well over a trillion dollars at this point, into dead institutions be they banks or corporations. Given that none of this has done anything to stem the great economic decline we are now all facing, why do they keep doing it? There's a definition of insanity if I ever saw one. Why for example, given that credit is drying up, consumer demand is contracting, and job losses are mounting does any government think pumping money into the auto sector is wise? So it keeps people employed producing goods for which there is rapidly decreasing demand? How sustainable do they think that is? Sure it was a backbone industry, but it is also an industry with no future in an emerging era of deep economic decline and oil scarcity. Consider, for example, what would the $450 million just allocated to the auto sector would do for reviving a domestic passenger rail service.

I really hope that somewhere behind the scenes, governments are drawing up alternative plans for when we do hit bottom. Because heaven forbid they do something tangible and productive now. The writing is on the wall but no-one wants to acknowledge it.



Correction: $50 billion has not been assigned the auto makers, but the banks. The Canadian auto figure is $450 million as of today.