Naomi Klein

When the Soviet Union collapsed, the Neocons announced that the economic debate was over, communism was finished, capitalism and especially their brand of capitalism was the only way to go.

After 9/11, it was obvious that the "War on Terrorism" was going to be expensive. Who was going to pay for it was less obvious. The Federal Reserve Bank sensing the US economy was about to go down the toilet dropped interest rates. That made borrowed money cheap and we Americans dutifully spent. Now there was a surplus of money and expansion of the credit market was the only way to absorb it.

Housing became more affordable almost over night and with more dollars in search of a finite housing market, prices rose dramatically. Now home owners found themselves with a seemingly ever increasing equity in their homes. That lead to an expanding second and third and fourth home mortgage market. Like a Ponzi scheme, as long as housing "values" escalated and more people could be induced to borrow more, the economy seemed rosy.

But the slack in the chain was disappearing and the credit market hit the end. Mortgage companies started folding, banks tightened credit, home owners started seeing property values decrease, bankruptcy loomed. Now credit is tight and home prices are inflated.

I caught Naomi Klein on Democracy Now and heard the best expression of a "third way" that I had heard in years. You can download that speech and interview here - http://www.democracynow.org/article.pl?sid=07/08/15/1432250 More from Naomi is available here - http://www.naomiklein.org/main