Bounce back?  Splat is a better word.

You’d expect the chief central banker to argue that the financial system must be “stabilized”, that is, rescued, in order to save the economy, but why is there no argument to the contrary? Why is there no voice in Congress to challenge this perverse notion that banking powers the economic engine when common sense knows that it is labor that drives production and demand, not finance?

So completely has the financial sector taken control of our economic life that the means to facilitate the exchange of goods (money) is regarded as even more important than the production of those goods.

The exploitation of producers and consumers by the financial sector has led us into this killing deflation, and this is generally known, but rather than speak the truth, that consumers are exhausted by debt and something must be done to bail them out, our leaders speak most urgently of stabilizing the financial system and only as a kind of after thought pass an inadequate stimulus bill.

A fundamental shift in priorities is required to get the economy going again. Finance has to take a back seat to labor & production, but this is not happening. Nothing has changed. Financiers are in control of reforming the financial sector. No nationalization! The privileges and prerogatives of finance are sacrosanct.

Obama’s populist rhetoric is just that, rhetoric. He will not take on finance and attempt to return the economy to common sense priorities. And the Republicans resist government spending, insisting on tax cuts, clearly ignoring the fact that it is not taxation and regulation that inhibits production as much as it is the predatory and dominant role of finance that bleeds labor and business with exorbitant interest rates.

One hopes that there is economic recovery, of course, but that is a short term hope. Maybe we’ll move out of this bust into another boom, but that is very doubtful. The productive economy is burdened with a financial sector it cannot sustain and another boom will more than likely not occur.

On the other hand, if there is no recovery and things get much worse, this may provoke a system reset and an economic realignment. The derivatives market could be eliminated, the influence of finance curtailed. That would be a prescription for a sustainable economy without these destructive and unnecessary boom/bust cycles.