Super D: What happens when some naive, gullible youth (Obama voters, perhaps even ambitious Obama himself) decides that we don't just need a rainy-day fund (to be routinely plundered by Congress, as with Social Security “trust funds” of no actual value whatsoever now — they merely are future claims on additional revenues that will have to be raised somehow, no matter what the idiot Denialist-defenders keep yammering) but that we need to ape other nations and develop a US “sovereign fund” ourselves, to make the US government openly and directly a large-scale institutional investor? (If in the USA and even elsewhere, expect scumbag activism, demands for “social responsibility,” “Israel divestiture,” labor-and-enviro fad-following, and so on) — it would be grotesque as well as repellent to people of quality.

1. It's “stripped,” not “striped” (like a zebra or a candy cane at Christmas).

2. The bubble was not only the fault of the “gamesters” as you call them, but the many members of the lay public who were greedy who believed that stock prices, then home prices, would continue to rise indefinitely; they also wanted in many cases much more house than they could afford, and they chose to engage in not only silly but wrongful behavior when it came to home loans and home equity loans. These people were more gamester-like than how you depict people in finance.

3. The consequences of what is currently happening have been ridiculously hyped and grossly sensationalized, and you are guilty of the same here.

4. If you advise us to be “afraid, very afraid,” irresponsibly so, aren' t you also being panicky?

5. Ironically, in any industry or part of the economy, the most qualified are the participants in it, those in the industry concerned. Government bureaucrats aren't as qualified, obviously, and they likely will make things worse, not better.

6. What about the more broad view of the economy (rather than obscession with depicting the finance industry, but not where most of the problem is, with the borrowers in the housing bubble)? Rudi, if you had a chance to look at that book by Roger Bootle, take note. First, the banks who have been given money are sitting on it, rather than lending it — they can't be made to lend it (nor should they be). They aren't lending it and may call in other bad loans due to risk aversion. Second, the Federal Reserve just lowered the interest rate to the lowest it has been since the 1950s. We are already approaching zero per cent. The “ammunition” metaphors (which are in Bootle's books and on the lips of others, such as guests on NPR) are starting to be heard already (because at zero the ammunition supply will be exhausted). Concern about deflation is not crankish, but very sound.