Two weeks ago I received a copy of Assets, a quarterly publication by UCLA Anderson School of Management. To my amazement and disbelief, I read in it that we have yet to enter recession, the same one that we�ve been experiencing for almost a year. I felt like calling Fed-Ex to quickly return to this prestigious institution an MBA diploma awarded to me four decades ago, one signed by Ronald Reagan, then governor of California.

So you�ve been told that this is just another economic cycle you must endure, eh? Don�t you believe it, not for a minute! Years of consumerism withdrawal and very serious economic rehabilitation await us thanks to past extreme greed and a predatory capitalism that reached its zenith during Bush-Son�s occupancy of the White House.

Perhaps the greatest sense of civic pride that Americans have always had is the belief in Lincoln�s dictum stating in the final sentence of his Gettysburg Address: ��and that government of the people, by the people, for the people, shall not perish from the earth.� Except that ours is neither a government of the people, certainly not by the people and most definitely not for the people. At the federal level, at least, our executive, legislative and judicial branches attest, for the most part, to the existing tyranny of an elite few.

It�s not more confidence that we need in our economy and its institutions. That comes effortlessly to a society where neighbor takes care of neighbor, and the well-being of any one individual becomes unquestionable duty for the rest of us. It is honesty, not pseudo-confidence, which needs to be promoted; mandated if need be, at gunpoint -- where the gun is truth. Without honesty in government and the mainstream media, which is our nation�s malady these days, capitalism has transformed us into a predatory society. Our very own Ronald Reagan would be proud of us, for we have won one for Greed . . . and that for him would�ve been even better than winning one for the Gipper.

Nobody wants a state of economic panic, not here in the US or anywhere else in the world; but neither do we want to continue living in deceit to the realities that we face today. The capitalism we have lived under for well over two decades both in America and in �let�s-imitate-America� elsewhere, has had an infected wound in each tentacle of the economy, all of which have finally reached the gangrenous stage; so we either cut those tentacles off, and painfully grow new ones with determination and a strong effort, or bury capitalism once and for all and replace it with a system less prone to this greed-disease -- one with regulatory safeguards to prevent four-fifths of society from being ripped off by the other fifth. Let�s put an end to that �caveat emptor� (let the buyer beware) which has been the adopted mantra for those who insist in economically screwing their neighbor, all under the mask of �rugged individualism� and an excuse in blaming the poor for lack of personal responsibility . . . when thievery is at the root.

So as a postmortem to another act by Congress of improvident malfeasance, almost a trillion dollar�s worth . . .�for openers,� a worthless rescue effort for non-affluent America, we want to postulate why it won�t work . . . in getting the economies of this nation, as well as others infected by ours, to improve at all, much less to march on the right course:

1. Those $700 billion applied at �the top� will do little or nothing to open additional credit channels to the productive (efficient) sectors of the economy, or the much-needed help required in upgrading the nation�s infrastructure. Much of it will only serve to prop up financial structures that are already weak and collapsible, and little positive help will filter down. After all, there are still upwards of $6 trillion in �make believe wealth� that somehow, rapidly or slowly, needs to decompose or disappear -- at least $2 trillion in housing; $1 trillion in commercial properties; and $3-4 trillion in the financial markets -- and that�s just in the United States!
   
   
2. For years, Americans have been led to believe that there�s economic magic in owning real estate, an abracadabra code to open the vaults to self-multiplying wealth. Even people rational enough not to believe such a Ponzi scheme, were also sufficiently greedy to go along playing musical chairs. Thus a belief in an ever increasing value for their homes became very elastic on the way up; but now, accepting the fact of that value disappearing has become very inelastic and most people are unwilling to �sacrifice� selling their homes at that intersection of supply, demand and its resulting price. That is likely to tie the disappearance of �make believe wealth,� a good portion of it, to inflation; for that is, psychologically, far more acceptable even if it bears the same or worse end results.
   
   
3. Deterioration in the value of commercial real estate will take hold at a much faster pace than with residential, given a more rational approach in business to the reality of what value is. And soon, as consumption shrinks to its proper level, one determined by productivity and not illusory wealth or irresponsible credit, we�ll see ourselves with an effective use of our buildings (malls, restaurants and myriad other structures) probably at not much beyond 60 percent which brings overall new development almost to a screeching halt with little chance for resumption of meaningful construction in this sector for some years to come.
   
   
4. As profits are decimated for an economically mature America, and much of the industrialized world, and earnings multiples also decline because of slower GDP growth, the capitalization of our markets will show sober, realistic values which are likely to bring financial indices down 30 percent or more in the next year. In the US, that would mean shedding another $3 trillion in investments.

Legislators in Congress, who voted to throw $700 billion of taxpayers� children�s added debt into a bottomless well, whether because of well-meaning ignorance or, more likely, their servitude to those who purchase their jobs on Capitol Hill, deserve the scorn of the people and should not be reelected. Sadly for us, among them are two senators who aspire to become in four weeks commander-in-chief of both military and financial affairs.

The Bush administration, the Fed and Wall Street, accompanied by the Bullish-on-America Choir of financially-challenged boys and girls at CNBC, have been laughing at Jane and Joe Citizen for years; now they rub it in calling us all, in mentis, stupid. Only thing left for Wall Street to do now is bundle our stupidity in new financial instrument paper, CSS (Credit Stupidity Swaps), thus creating trillions of dollars in fools� wealth.

� 2008 Ben Tanosborn