The problem with fixing a problem as incredibly big as the one we have got, is that the more that people start to unravel the problem, the more that the depth and seriousness becomes apparent.
The biggest problem of all though is that of public confidence.
We have all known deep in our psyches for years that there were crooks in the financial system, just like there are crooks in government and everywhere else. Crookery apparently makes the world go round. As long as there isn't too much of it and as long as turn away when we see it.
The real problem arises when the broad community "gets it". When confidence in the systems that govern the way we work, the way we are governed, the way that we buy and sell things, goes, then the problem that comes into being is that all the economic modelling that takes place at the macro level is worthless.
Because the fundamental models that govern society actually rely on the general public acting in a relatively random and asymetric way all the time. Lack of confidence becomes a unifying unspoken rallying cry to not participate in consumption. That is the fundamental ingredient of a depression, where prices are chasing buyers.
However, there are buyers for some things as a story in the Daily Telegraph stated:
In Florida, a state devastated by tumbling house prices and repossessions, the
inhabitants are arming themselves against recession, with requests for
concealed weapon permits up 42 per cent in the past 45 days.
You can see that this is a tale that is not going to end well for Americans. The people are getting scared, so they arm themselves "against recession". This is the legacy that Bush has given America.
Next we should expect to see the sales of canned goods going up as the people build their bunkers. And then the meme that starts in America travels relentlessly around the world. Fortunately in Australia we don't have a gun culture...
On the other hand it could be a "Mad Max Societal Meltdown Led Recovery". I think they already made a movie about that...
