The Essence of the Rescue Plan

Cat Burglar

As explained by Mike "Mish" Shedlock one of the smartest and most iconoclastic financial analysts writing on the economy:

"To stimulate lending, the bailout plan will attempt to recapitalize banks. The method of recapitalization is best described as robbing Taxpayer Pete to pay Wall Street Paul. In essence, money is taken from the poor (via taxes, printing, and weakening of the dollar) and given to the wealthy so the wealthy supposedly will have enough money to lend back (at interest) to those who have just been robbed.

Unfortunately, no matter what seat of the pants strategies they come up with, I can guarantee in advance that the unforeseen consequences of whatever decisions they make, simply will not be any good. Besides, it is axiomatic that plans to rob Peter to pay Paul, can never really work in the first place, regardless of how much time is spent crafting them."

For some of the finest discussion you can read anywhere about the economy — if you really want to know what's going on, forget about MSNBC and Jim Cramer and all those idiots — look no further than Mish's Global Economic Trend Analysis.

I read him daily. If I had to make a choice between "Mish" and The Wall Street Journal, quite honestly, I'd take "Mish"!

(Richard Metzger is guest blogger.)