The fix is in!

Well...the hacks came through, just like Churchill said they would. At least the hacks in the U.S. Senate. The Senate voted last night to burden the entire nation with Wall Street’s mistakes. Only a handful of Senators dared oppose the measure, among them Bernie Sanders, a socialist from Vermont:

“The masters of the universe, those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse,” Sanders said, and are demanding that the middle class “pick up the pieces that they broke.”

Sanders must be delighted by the collapse of investment banking. But he says the way they’re going about imposing socialism is unfair to the proletariat. Oh well...you just can’t please everyone!

Over in the House, the hacks are taking up the measure today. They’re sure to want a few more lights on this tree – tax breaks for their big contributors, bridges, schools...an increase in Congressional salaries – but with the media looking so closely, they’ll probably go along with the Senate and pass the thing without further reflection. We say ‘further’ in the spirit of mischief. The whole project has been taken up with remarkably little real reflection of any kind. But we’ll come back to this in a minute...for the moment, the sky is falling...and the whole world turns its weary eyes on the U.S. House of Representatives for protection.

For example, a big chunk of blue hit the auto industry yesterday. Sales were down to levels not seen since 1993. Even the fuel-efficient Japanese models weren’t selling in September; sales at Toyota were down 32%. And those nice F-Series trucks – the most popular vehicles made by Ford – fell 42%. We used to own one. A nice dark-green pickup. We drove it to work. We drove it on vacations. It was roomy, comfortable...even fun to drive. It used a lot of fuel, but back in the early ’90s, gasoline was so cheap, we never thought about it.

But that was then...this is now. Back then, Ford and GM were still going concerns. Now they’re going out of business. Ford’s stock has only $4.55 cents left to go...and there will be nothing left. GM has $9.45 between it and zero.

“Pass this legislation,” said a GM official. It’s the only way to break the “psychological cycle” that keeps people from buying cars and trucks, he believes.

So you see, dear reader, we are back to the ’30s...and we have nothing to fear but fear itself. It’s all in our minds! If people weren’t so ‘negative,’ they’d be more positive. And then, they’d start to buy things again and everything would be all right.

It’s all in our imaginations! We don’t really owe too much money. We didn’t really spend too much money. And those nifty CDOs, MBSs, CDSs...Lehman...Bear Stearns...Fannie, Freddie...Northern Rock – they’re all okay after all.

But bits of sky keep coming down.

Copper has collapsed. So has shipping. Both are telling us that they world’s economy is slowing down. Housing prices are falling faster. Job cuts are accelerating. Local governments are getting hit by lower revenues – they’re having to cut back. Households are cutting back too. Wal-Mart says it’s cutting prices for Christmas toys. Newspapers and magazines are cutting pages.

The sky is falling and anyone with any sense is running for cover...and protecting their portfolio at the same time. The meltdown is far from over.

That leaves the politicians and the bureaucrats – right out in the open.

According to the theory – and here we flatter it, for there is no theory ...just wishful thinking – the feds are keeping their heads while everyone else is panicking. The Wall Street boys now say prices for their assets “make no sense.” They say Mr. Market has lost his nerve. That is how stalwart government employees are now supposed to be able to buy up Wall Street products at such large discounts they’re almost sure to make a profit.

It’s the fatal conceit...explained Friedrich Hayek in the ’30s...that somehow public employees are immune to the blandishments of power, money and the madness of crowds...that they alone are above it all, like a politician who is too rich to steal and too dumb to lie, or like a bureaucrat who can’t be bought, because he is priceless, and can’t be outwitted, because he is witless.

It ain’t necessarily so.

But that is the way it goes. Humanity makes progress in science and technology. In politics, love and banking it merely rehearses the same dramas, tragedies and farces – over and over, forever and ever, amen.

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