Well, Henry Paulson spoke yesterday. He said Americans could expect some relief from the subprime mortgage problem very soon.

What could he have in mind? The ‘teaser freezer’ program we discussed yesterday. Isn’t it wonderful how government can make things better by decree? By edict! By passing a law! Got trouble with your contracts? We’ll just change ’em. Can’t pay your bills? We won’t let the Constitution’s right to contract stand in the way...we’ll alter the terms...or impose a moratorium on collections. Lickety split, no problem. Spend too much money? Running a little short? Don’t worry about it; we’ll print up some more.

Who says government can’t be a positive force?

“World War II was the last government program that really worked,” George Will used to say. And we’re not even sure about that one. In Europe, we defeated one monster...but saved one that was just as bad, or worse.

Well, now we have another chance. This time, we’re going to rescue Americans from the evils of predatory financing. That’s right. The evil predators hunted for poor people. These people had no money, and often, no jobs either. And then, the predators got ahold of them – duping these people into accepting a check for $100,000...$200,000...maybe even more.

The poor people moved into a brand spanking new house. They enjoyed their new digs – they spilled beer on the carpets, broke the handles on the cabinet doors, left hand prints on the walls...

...and now, wouldn’t you know it; those evil predators want their money.

Of course, the poor people can’t pay what they don’t have, so they’re being forced to pack up and move out. How’s that for a national tragedy? Surely, something can be done!

Ah yes, the teaser rates can be frozen, so the poor people can stay a little longer without having to pay for what they get.

And while we’re at it, say the feds, we’ll lower interest rates, and maybe print up a few more $20 bills; that ought to help, too.

That’s the trouble with government tricks: they don’t really work. You can’t really make people richer or erase their mistakes by edict. You can’t even make them richer by giving them more money.

Think of people who are on welfare. Are they richer simply because they get a check from the government? Not the ones we knew in Baltimore. They would have been better off without the checks; they would have been forced to get jobs, to straighten up, to acquire the habits, skills and discipline of successful people.

Think of the people who win the lottery. They get a big dose of cash. For a while, they’re able to enjoy it. But then, usually after a couple of years, they’re broke.

Or take Spain in the 16th century. It was the richest nation in the world. But the wealth came from larceny, not industry. It stole the gold from the Incas and Aztecs. Scarcely two or three generations later – Spain was broke. It lived in poverty for the next 300 years – until low interest rates from the European Union brought a boom.

Easy come, easy go.

“It works that way on Wall Street, too,” said a friend, “The guys I know make a fortune. They get bonuses of more than $1 million per year. But do you think they have any money? Not really. Their expenses rise to meet their income. Pretty soon, they NEED $1 million a year just to come out even.”

And think of the poor people of Zimbabwe. If money could make people rich, they’d be the riches race on the planet. The Zimbabwe government is printing up new money so fast the printing presses are melting down. The Economist reports that now “Zimbabwe’s chief statistician said he can no longer work out the country’s inflation rate because there are not enough goods left in the shops to count. In September inflation was reckoned to be almost 8,000%.”

True prosperity doesn’t come from money, but from habits, ideas, and attitudes.

As we were speaking to an investment group on Friday, we realized that we had stumbled onto something. The idea first surfaced while watching British television. There is a show in which entrepreneurs try to get funding from a group of rich people. The moneybags act like they know what they are doing – and sometimes they do. But what is interesting is that the supplicants readily accept humiliation; they believe that the route to success lies in getting the big shots to back them.

What are they thinking? They believe that making money is so important and that the way to do it is to start a business with some rich partner. Most amazing, viewers seem to think so too or at least are willing to be entertained by the process.

This kind of show would have been impossible a few years ago. Making money was a private matter; you wouldn’t want to put it on display. And in most societies, throughout most of history, grubbing for money was not especially laudable either. Most people in most eras have had better things to do. The idea of making money was actually reprehensible to many. “Behind every great fortune lies a great crime,” said Balzac. The French still believe it. There is something slightly foul about having a lot of money. And if you do have money in France, the last thing you want to do is to flaunt it; or someone will soon be trying to take it away from you.

Not so in the Anglo-Saxon countries. We believe in money, in getting as much of it as possible, and in spending it too. Just look at the streets of London or Los Angeles; compare them to the streets of Paris or Rome. The English-speaking cities are full of flash – big, expensive cars. The streets of European cities have fewer Hummers plowing through the lanes. The rich tend to hide their wealth, as if they were embarrassed by it.

Even in the English speaking countries, people used to have less faith in money. Most importantly, they weren’t so sure it was so easy to come by.

They didn’t talk about it so much. They didn’t lust after it so avidly.

We live in a New Era, dear reader, without even realizing it. Until the 1980s, people didn’t believe in modern capitalism the way they do now. They didn’t think that our American-style capitalism, entrepreneurship and the free enterprise system were so dynamic that we could deny the lessons of centuries. They didn’t believe that ‘deficits don’t matter,’ in other words. Or that you could buy what you don’t need with money you don’t have and expect to prosper.

Now, at least in the subprime mortgage business, we’re rediscovering ancient truths...that household deficits do matter after all. Watch out, dear reader, more truths are headed our way.

So far, credit card debt is holding up remarkably well, The Economist tells us. Goldman Sachs (GS) says losses from credit card debt could reach $99 billion – if the problems in subprime leak over to the credit card industry.

No problem so far...customers are still paying...which is a bit surprising, since you’d expect the consumer to be getting a little behind.

From the housing market comes this little note from an Australian reporter:

“The last one out of Cleveland, please turn out the lights,” writes Paul Barry. Says Barry of the Ohio city:

“...the streets are lined with empty houses, dead gardens and demolition notices pinned to the front doors. One in 20 homes are now in foreclosure.”

Turning to the dollar, The Economist quotes an unreliable source, your editor:

“The long term value of all paper currencies is zero. That is the fond saying of Bill Bonner, goldbug and publisher of the Daily Reckoning, a contrarian financial newsletter.”

Dear readers take note: we are talking about all paper currencies, not just the dollar. We guessed that the dollar would fall to $1.50 to the euro (EUR). So far, it’s gotten about a penny short of the milestone. But it looks to us as though the dollar may want to correct, meaning, go up. In the long run, it is worthless trash. But so are the others. Which of them becomes trash first, well, we wish we could say. At this point, we don’t have an opinion. Will the dollar go up or down? We don’t know. But we certainly wouldn’t want to keep our wealth in it.

The dollar’s value comes in some measure from the fact that it is the world’s leading brand. That seems to be changing. The greenback seems to be going out of style. Already, in the film American Gangster hip-hop musician Jay-Z flashes a wad of cash. The cash is 500-euro notes, not dollars. The big euro bills are already a favorite of drug dealers. Soon, they will probably be everyone else’s favorite too.

Meanwhile, as predicted here, corporate profits are falling. Bloomberg says there’s a recession in corporate earnings, and “the economy might be next,” continues the report.

“The earnings recession has already arrived,” says a Merrill economist, “We are going to see an economic recession in ’08.”

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.