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Book Review: The Trillion Dollar Meltdown by Charles R. Morris

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The Trillion Dollar Meltdown should be required reading for all people in public office. Further, all those people should be administered a test based on this book that, if not passed, would leave them without that feeding-at-the-public-trough job. This book is not an easy read, but neither is it particularly difficult for anybody with a reasonable attention span, and who has the smarts to pass a high school equivalency exam. Oh, darn! That leaves out many people in public office, doesn’t it?

In movies, books, stage plays, and even in bedtime stories about who we’d marry when we grew up, Congresspeople, lawyers, and bankers are inevitably portrayed as these beneficent, wise, caring, super-intelligent people who are the bedrock of the U.S.

Phhffftttt! and Phhffftttt! again.

If what Morris has to say in The Trillion Dollar Meltdown is true, if only 20% of what he says is true, then they should all be hung from a rope tied to the back of a pickup truck and dragged, very slowly, through the Sonora Desert. And be fed a bunch of potato chips and heavily salted peanuts beforehand.

Morris logcially and systematically lays out why it's really no surprise that the United States economy is in the deep doodoo that it is. Actually, what’s surprising is that we aren’t deeper in, and that we didn’t get there much sooner.

“Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply,” explained a Harvard-trained economist during a November 21st speech before the National Economists Club in Washington. “But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services.”

In plainspeak, what the above paragraph means, according to New York Post economics writer John Crudele, is, "we'll just print more money if the economy doesn't respond to traditional remedies."

And who was the guy who uttered the above? None other than good ole Ben Bernanke, the “financial guru” who was appointed as Federal Reserve Governor, which is the nation’s top moneyman.

Brilliant, Ben. Absolutely brilliant. How much are we paying this guy? The one who’s got the shovel and is furiously piling more and more doodoo onto our heads?

The thing that surprised me about this book, though, is that it was written well before our wild-eyed run down the current economic bobsled track we’re currently on began (you know, that stretch of twisting downhill, track where you see nothing but ice ahead).  Morris begins by giving us a good foundation on the basics of economics and leads us carefully through eight short chapters that lay the entire mess out in fairly easy to understand and comprehend language.

The first two chapters recreate the background and circumstances for the 2000s credit bubble. Chapter 3 recaps three critical developments in the 1980s and the 1990s which came together to create the “great credit bubble that is now imploding around us.” Chapter 4 gets a little complicated, with a rundown of numbers, the methods and mechanics of the credit bubble, and the roles that the nation’s money regulators play.

Chapter 5 summarizes how we’re knocking the puddin’ out of the dollar, the piles of money amassed by some of the world’s nefarious leaders, and how we’re now, ultimately, paying the piper, forced to sell off many of the things we, and in some cases our ancestors, have amassed, in order to pay off outstanding accounts. Chapter 6 is “The Great Unwinding,” where Morris brings the previous chapters all together, gives the hard numbers, and gives examples of future scenarios as to how this mess will eventually all play out.

The final two chapters are a wrap-up of some of the consequences of the crash, and some current theories on how we can get out of this mess with the least amount of gnashing of teeth. Regardless of the path our regulators and lawmakers and business choose, however, it’s all gonna be one very rough row to hoe.

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About Lou Novacheck