Voices in the wilderness keep telling all of us what is really happening and where our Ponzi scheme economy has brought us. But the financial sector keeps asking us to invest more money in this losing scheme. Today’s Wall Street Journal front page says
some of the country’s biggest property developers have become the latest to go hat-in-hand to the government for assistance.
They’re warning policymakers that thousands of office complexes, hotels, shopping centers and other commercial buildings are headed into defaults, foreclosures and bankruptcies.
…the industry is asking to be included in a new $200 billion loan program initially created by the government to salvage the market for car loans, student loans and credit-card debt.
The article doesn’t even mention General Growth Properties, owner of the Glendale Galleria, and currently in desperate negotiations with its lenders to avoid declaration of default. General Growth’s financial troubles have been followed regularly by the national financial press, but this article names several other large real estate developers in trouble and lobbying for assistance.
Jack Kelly’s commentary today in Real Clear Politics says it clearly once again:
We’ve been living beyond our means on money borrowed mostly from the Chinese. Like Bernie Madoff’s Ponzi scheme, this had to end at some point, and could only end badly.
The stock market crash has sobered many of us up. We’re saving as much as we can to guard against the rainy days that appear likely in our future.
But tens of thousands of Americans make their living selling us things we don’t need and can’t afford. If we live within our means, their jobs are in jeopardy, and the recession could deepen.
The theory behind the stimulus package is that we can spend our way out of the recession. As former Sen. Fred Thompson put it, this is like telling a fat guy the way to lose weight is to eat more.
If the government bails out the property developers, will Americans buy enough of the stuff sold in their commercially leased spaces to keep their tenants? Who will bail out the leases?