What Scrooge McDuck Thinks of the Bailout

Duck Tales was the first Disney cartoon series produced for syndication. 100 episodes aired between Sept. 11, 1987, and May 6, 1990. I remember watching one striking episode with my (at the time) young sons about exponential expansion of the money supply. (Yea, I know - this was supposed to be a kid's cartoon - but I really liked this episode!) The Mises Institute, has assembled some poignant excerpts to provide a handy guide for anyone who wants to study what Huey, Dewey, and Louie learned about money. With the "multi-phonic duplicator" currently running at full speed, are we getting closer to hearing mom's say, "Wipe your feet kids, I don't want you tracking in a bunch of money again?"

Comments

[Randy]

I try to avoid my own natural skepticism on this topic and view it as those in our government do, because like or not, our monetary policies are essentially based on Keynesian theory. Yes, there are lots of reasons to worry about inflation, which Bernanke was worried about just a few months ago. And, yes, the Fed fears deflation even more than inflation for all the reasons stated in the article. But the 8 trillion dollar question remains, “what other options are left at this point?” The main challenge Bernanke, Paulson, Bush, and others have been facing is how to avoid another “Great Depression” and try to contain the current crisis to what may be more like the “Great Recession” today. I think their idea is if they can reignite the lending/spending rut that got us here in the first place, at least partially (i.e. my spending becomes part of your earnings, and your spending becomes part of my earnings), then there will be fewer job losses. Of course, if they do too much printing, that could lead to run away inflation in the future, not to mention the terrible debt the Treasury is accumulating. I have no idea what the best path is, but it sure seems like a tricky balancing act.

[Austin]

We already have run-away inflation. Runaway inflation is what caused the housing, tech, and credit bubbles. Every time one of those bubbles burst, Alan Greenspan created a new one. And that is exactly what Maestro's successor is trying to do right now.

All this talk about deflation is a smoke screen: it's not real deflation, it's a move along the demand curve. Calling ebbing growth and demand "deflation" is absurd; if anyone with half a brain were doing journalism right now they'd be hammering Bernanke and Paulson for charting a course to economic oblivion. But that's what happens when the propaganda machine sells people on the idea that "deflation" is falling prices. The only thing that the Fed will do by continuing to create an avalanche of new credit options is ensure that we experience STAGFLATION of biblical proportions.

Bernanke and his ilk may even succeed propping up our inflation-addicted economy in the short run, but they will only store up an even bigger adjustment for us sometime later. At some point, our economy will no longer be able to build a dike big enough to withstand the coming tidal-wave market correction.

There is no doubt that raising interest rates now, as the Fed should have done at multiple times in the last 40 years, would effectively kill the United States economy. But, if they don't, the U.S. economy will die anyway. Every stalling tactic only ensures that the correction will be even more horrific-it will NOT in any way mitigate its severity. Bernanke isn't making things better; he's making them worse and concealing the harm he's doing. It's too late to avoid disaster now-the only questions are 1) how soon and 2) how severe? The plan Bernanke is pushing answers that the disaster will happen 1) later (maybe) rather than sooner, but 2) will also be exponentially more destructive.