Spotted this article on Reuters.com this morning called "October consumer prices and home starts plummet" and found it really fascinating. If you read it, it talks about things like housing prices dropping and deflation as bad things. Think about that for a moment.


Houses dropping in price means more people can afford houses and fewer new loans will be defaulted on.

Isn't that good for the economy?

It's certainly good for people who want to buy homes.


But the Reuters article insists that the economy is weakening even further than it has.

The article also mentions deflation as another example of an ever-sinking economy. The thing is, what do we mostly bitch about when it comes to money?


Inflation.

So, shouldn't deflation be a good thing to us?

I say yes.

While the article also reports on consumer prices dropping and a few other things that generally the economy is weakening, I say prices dropping are part of the system working. Yep, that's right--this is ThePete saying capitalism and free market economics both work just fine when not abused. Leaving them be, letting losses and crashes occur means that things were getting to big for the system to support. Now we can rebuild on more stable footing.


Prices dropping is a natural function of the law of supply and demand. We American consumers have stopped spending as much as we used to--THIS IS A GOOD THING.

This fills my heart with hope for humanity that we're not just a bunch of dumb sheep doing what we're told. This is proof we can react to what is really happening and do the right, logical thing.


So, we stop spending, prices drop to entice us to buy, to a certain degree we do, and slowly but surely, the economy builds back up again.

Color me malfunctioning, but my memory circuits tell me this is how things are supposed to work.


Bailouts now would just delay our economy's recovery.

Tell me I'm wrong--please--and tell me how so I can learn. Thanks.

One last thing about this article. Since it puts everything in terms of its level of badness for the economy, despite those things being good for consumers and really the stability of the whole system, doesn't this article end up coming off like an advertisement for the corporate greed mindset? That we all need to be buying and borrowing at all times to keep the economy moving and growing and dominating (despite it's complete crashing and bleeding out recently)? It reminds me of how the media isn't liberally biased, it's biased toward money--and the furthering of the belief that "greed is good."


Gordon Gecco is dead. Let's leave him buried, shall we?




Posted by email from thepete's posterous