If you need further proof that the largely imaginary financial economy has become the real economy, just compare the two bailouts:

Cost of supposed bailout of the production economy, the “former real economy”, with Obama’s stimulus plan: nearly $800 billion.

Cost of bailout of the financial economy with Bernanke and Geithner: $4 trillion and growing.

Maybe it’s time to consider shrinking the financial economy back to its original purpose of serving the production economy, rather than usurping it.

The problem: We’d have to get rid of most securitization markets, and this would entail a social upheaval of unprecedented scale.

That’s probably why Geithner and Bernanke are intent on saving the securitization markets at all costs, even if that means diverting another $1 trillion to fight the imaginary financial monsters created on Wall Street.