One of many possible futures

Caroline Baum knocks one way, way out of the park today with a look into one of our many possible futures, this one set nine years hence with President Obama and Treasury Secretary Geithner still grappling with the aftermath of the financial crisis of 2008.

Just delicious ... and more on root cause to boot!

``The root cause of the stress in the capital markets is the real estate correction and what's going on in terms of the price declines in real estate,'' then-Treasury Secretary Hank Paulson had told the American public on Sept. 18, 2008.

What better way to get at the root than a root canal?

In the waning days of the Bush administration, the president signed the Homeowners' Price Support Act (HPSA), including a freeze on both foreclosures and home prices.

The results were textbook predictable. Like all price floors, this one created a surplus -- of homes for sale at an above-equilibrium price. The law exacerbated the glut of homes, which was the reason prices were falling in the first place.

Those who wanted to sell their homes below the regulated price had to do it on the black market, throwing in perks to attract buyers.

It wasn't too long before the federal government extended TARP's reach to include the troubled assets of U.S. automakers.

``These illiquid assets are clogging up our nation's highways, not to mention our environment,'' Treasury Secretary Tim Geithner said six months after Paulson, his predecessor, declared the financial system in need of drain-cleaning.

There's much more - a new government guarantee on "stocks for the long run", a Beijing-based IMF, "fixing" long-term interest rates in the U.S. at four percent, securitizing Treasuries, and a dearth of financial engineering talent in 2017...

It would be much funnier if it weren't so possible.