Jewish World Review Feb. 3, 2011 29 Shevat, 5771
Bubbles, Bubbles Everywhere
By Victor Davis Hanson
The 2008 financial crash originated with a housing bubble. Not long ago, the cheap money policies of the Federal Reserve, the infusion of trillions of dollars in new foreign investment, and the misguided policies of
Builders, lenders, realtors and bureaucrats all got in on the easy-money Ponzi scheme -- until a few noticed that the emperor had no clothes and that rather pedestrian homes were hardly worth what unqualified purchasers had paid for them. Financial hysteria followed when shaky borrowers began to miss exorbitant mortgage payments, walked away, and lenders panicked. The subsequent meltdown is history.
There is a similar pension bubble rising as well. There is perhaps as much as
There may already be an immediate
Then there is the higher-education bubble, as collective student debt nears
There are disturbing commonalities to these expanding bubbles -- and others like the recently enacted health care entitlement on the way. The rich and connected seem exempt from the impending reckoning, and the poor assume government will offer them debt relief. Those in between are on their own and will have to pay more for receiving less.
America is not creating enough wealth to justify the notion that everyone should go to college, get a higher-paying job than their parents, buy a nice, affordable house, and retire earlier and with more money than did prior generations.
We have forgotten what wealth is -- and how tenuous the good life is. Riches are created by educated and skilled workers who directly translate natural resources into commodities that make life easier. The nonproductive sector in government, law and banking must facilitate that process with efficient and transparent financial and political systems.
Instead, we are failing to provide our college graduates with unique skills that make them rare assets in the global competitive arena. Meanwhile, our more talented and better-trained workers are suing, subsidizing and regulating more than ever -- instead of searching for more oil and gas, supplying more water to productive farmland, fast-tracking nuclear power plants, manufacturing machines and consumer goods, or devising new and more efficient ways to help others to produce such food, fuel and products. In other words, we are living the good life in the abstract that we have not quite earned in the concrete.
America is a naturally rich country. Unlike
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Victor Davis Hanson, a classicist and military historian, is a senior fellow at the Hoover Institution and a recipient of the 2007 National Humanities Medal. Comment by clicking here.
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