Weaning Away from a Bailout Culture? Crack Up Boom Next?

A sense of desperation led us to deduce that Americans have drastically turned towards the bailout syndrome to seek relief from their economic and financial travails.

And such sentiment has been powerful enough to have even driven the recent election outcome. And because of popular demand, the political landscape appears to have likewise accommodated such sentiment.

But times could be changing, as Americans appear to be waking up to the realization of the futility of embracing bailouts as elixirs.

That’s if we go by the polls.

Courtesy of Gallup

According to Gallup, ``With lawmakers weighing the prospect of a multi-billion dollar bailout for the U.S. auto industry, Gallup finds Americans falling out of favor with its $700 billion predecessor. Since October, Americans have flipped from being more positive than negative on the Wall Street bailout, 50% to 41%, to being slightly more negative than positive, 47% to 46%."

And the same dynamics seem to be surfacing even in the auto industry.

Courtesy of Gallup

According to Gallup, ``A slight majority of 51% of Americans say they oppose the federal government's giving major financial assistance to the Big Three U.S. automotive companies, while 43% favor it -- representing a slight decrease in support compared to three weeks ago. However, if it is stressed that one of the Big Three companies were certain to fail without government assistance, support rises to the majority level of 52% and opposition falls to 42%.

All these reminds us of the admonition of Ludwig von Mises, ``But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against "real" goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.”

Could these signal the emergence of a crack up boom?