Here is a Piece which clarifies the entire financial crisis. Six Flags declared bankruptcy because it had $2.4 billion in debt. One might ask Why this seems so unusual to myself. Six Flags would appear to possess about $1000 per Customer of debt–not counting Operating Costs or anything else, had Record attendance at their Parks, and had already sold off some 7 of their Parks to raise revenue. One can accept some claims that the Parks made about $600 per Customer, it does not fit with an estimated Operating Cost of $75 per Customer, and actual Paying Customers probably equal one in three or four. I am talking here without any verified information of any kind, but would estimate that Debt Service equaled about $35 per Customer–whether they paid or not. I would use an old Organized Crime term of ‘Shelling out the Company’ but might subject myself to charges of Slander, one of the few areas of Libel which still seems to be enforced–never mess with Corporate Management.
Consider the Above in the context of this article. Paul Krugman finds it hard to imagine that ignorant Consumers may have actually chosen the correct solution, both to their own personal hardship, and to the reorganization of the economy. Ordinary people recognize that massive dislocation of the economy calls for massive reorganization, while well-paid Economists pretend that bankruptcy proceedings are a bad smell to be avoided at all Costs. Their Solution, parroted most effectively by Paul, is for the Government to become the Spendthrift replacement for a more cautious Business and Consumer. It is tacitly ignored that Government can adopt as worthless an Expenditure pattern, as had any Mortgage-Holder taking out Paper on Property worth 30 times their yearly Income. It might be as they described the Peasant fears in the feudal period, where the Lowly could smell disaster on the Wing.
One can finish Today’s reading with this Post, which may explain what is happening; Anyone who had sense enough to avoid the pitfalls of bad Spending policy, faces loss of Profits through Government policy to replace the Losses sustained. The Result will be the destruction of all previous Profits within the economy. It is instructive that the most prevalent Losers in the economy always utilize their power in Government to ensure All suffer the ravages of economic failure; the malignant power of Government at its worst. People soon comes to realize that Community spirit is more to be feared as an evil Ghost, rather than a benign folktale. lgl