Interest rates kept BELOW inflation rates were one factor driving people away from savings. When a basic savings account doesn't even keep up with the inflation rate than people are driven to riskier 'investment' strategies. Exposing ever broader segments of the population to the volatility of the market.

Stagnant wages (or raises that don't keep up with inflation) decreases net income and disposable cash. More money has to be spent just treading water each year leaving less and less money available to save.

Massive inflation in housing prices forces even relatively conservative people to go deep into dept just to buy a home. Increases in healthcare costs (more and more dumped directly on the employee) further drive down disposable income. Add to that inflation that means more than half of a family's budget goes to food, shelter, transportation and other basics where 30 years ago that number was closer to 25-25%. More and more Americans rely on credit cards to make basic purchases.

Is it any wonder nobody can save anything in the modern economy. The system doesn't leave enough money in our pockets to save. And what little is over gets sucked away by inflation.

That if we truly want to get the budget under control we have to #1 CUT MILITARY SPENDING, which accounts for around 1/3rd of the budget. And #2 get control over spending on medicaid and medicare which account for a sizable check of the remaining budget.

Until those two items are on the table the budget will crisis will NEVER be solved. All the things people like to scream about (foreign aid, NASA, NEA, education, earmarks etc etc) account for barely 5-7% of the budget. Killing all of them would be utterly meaningless.

But hey at least we get to make fun of volcano research.

And can go more than a week without at least one 100+ point swing.

As has been noted before, some of the biggest single day gains ever recorded on Wall Street occurred during the heights of the Great Depression (along with some of the biggest single day declines). The market is operating on pure emotion right now. With traders widely overreacting to any news, good or bad.

Stewart talks with one of the NYTs econ guys and as always is very insightful with both his questions and his observations of how this mess got so bad. In particular the discuession of how CNBC needs to suck up to CEOs in order to get interviews. He compared it to a weatherman interviewing Katrina who of course insisted that it was a perfectly safe storm and therefore nothing to worry about.

When he chooses to be Stewart is one of the best interviewers out there.

And I laughed so hard it hurt.

When the next right wing nut job blows up a federal office building in the midwest.

Mark my words, the next major act of domestic terrorism will come from people claiming to be 'Christians' not from people claiming to be 'Muslims'.

In the current economic crisis. My company's largest customer is a first tier supplier to Honda North America (28% sales drop last month). We've seen our sales decline by close to 60% over the last year. We've had three rounds of layoffs and are looking at 2 week shutdowns every month for the next 3-5 months. Our London sales office works with SAAB and BMW and they have watched their sales drop like a stone as well.

As others have pointed out even the mightly Toyota posted a loss last quarter and is projecting further losses this year.

The entire industry worldwide is getting decimated.

Yes GM and Chysler are hurting worse because of past poor decisions. But up until a couple of years ago GM was on its way to recovery. Chysler was probably going to die no matter what happened. Of the 'big three' only Ford has a real chance to come out this mess alive.

But our foriegn competitors are fairing almost as bad. Their governments are stepping in with bailout and loan packages to help them through the hard times.

Palin had a good couple of years. High oil prices meant she could hand everyone in Alaska a $1,200 check. That went a long way towards her 60% approval ratings. It also meant an easy couple of budget cycles. The arguements were over what and how much to increase state servcies.

Now she will actually have to govern. She has never had a good relationship with the legislature. She has no real understanding of how to govern (she hired a city manager in Wasilla to actually handle the day to day operations of the town leaving her only major duty to preside over city council meetings). What happened to Bush is 2005 and 2006 when the public finally caught on to his fundemental idiocy is about to happen to Sarah Palin.

I've seen some reporting that the Permanent Fund checks this year will be very low (lower than they've ever been) and its possible there may not even be Permanent Fund checks this year. Add to that the need to make up a billion dollar deficit and Palin's approval ratings will probably drop below 50% within the six months or so.

That will pretty much kill her chances at either getting Murkowski's seat or reelection in 2010.

My guess is Palin goes the Huckabee route and she'll have her own show on Fox premireing sometime in 2011.