In reality, consumption depends on income and wealth, and income and wealth depends on business. If business is profitable, personal income from work and investments will rise and that will finance consumption.

The thing is, despite very real business profits over the past decades, real wages never went up, and in fact declined. Most Americans carry debt and do not have “wealth” in the sense that Reynolds means it. The truth is that while the economy has done relatively well, most Americans saw their earning power decrease while the wealthiest Americans saw theirs increase. And then we cut the taxes on the people who actually were making more money, while simultaneously requiring the middle class and poor to contribute an even greater portion of their income to cover the difference.

I agree with Reynolds that the housing market should adjust by itself and no further regulations should be introduced, but he’s dishonest about it. He chides Bernake for, I’d imagine, the rate cut (which is the biggest thing the Fed has actually DONE so far—the Fed can’t order tax rebates for example, so I’m unsure exactly what problem Reynolds has with them), but it’s actually a good rate cut for almost all Americans, most of whom are facing mortgage and credit card debt. The only people it hurts are the big “investors” who, as we all well know, are almost all very very wealthy.

Do you agree then that Bush “bought” votes with his tax cuts and rebates of earlier this decade?

Ah, Dick Armey is a genius of the first order…oh wait…this is website too…coincidence? Thanx for telling us that voters are stupid too BTW.