Reads the AP headline. That was the latest threat from the Grand Poobah of Finance. I, for one, say let's risk (oh no, risk!, as if that ever stopped anyone in a corner office) the recession. Is the free market really free? Is capitalism, in the words of George Will, a system of individual gain and loss? Or just all gain all the time? I understand that the implosion of giant corporations entails a certain amount of collateral damage. I understand that I am a man of little means and my retirement isn't tied up in this alleged mess. I understand that I really don't understand anything about the twisted logic of global finance and speculative trading (aka legalized gambling). So all you eggheads can go ahead and set me straight. I'm sure someone will be able to tell me how these companies were indirectly responsible for the overall prosperity of the nation over the last ten years, that it all trickles down, and that these noble companies were taking on all the risk for little old me and now I want to have it both ways by punishing them for our collective greed.
So, fine. Let's pull the trigger. But I will tell you this: I don't want to hear any more preaching about government regulation of economic resources. No more drawing a halo and wings on the "free market." No more romanticization of the private sector, no more griping about welfare. Whether it's necessary or not, this is welfare in a tuxedo. This is "redistribution of wealth" (gasp!)
We can spend billions on this bailout but we can't guarantee our citizens basic health care? Don't get me wrong, overall I like our economic system, I think it works pretty good. But it is what it is. Sometimes it doesn't work all that well. And now we're gonna cry about it. Now we want that other system: the one where someone takes care of us. The one where the many take care of the few. The one where public money subsidizes private risk.
Fine. Let's throw 700 billion at them. But no more pretensions. We are a social democracy, not some pure market democracy, and not some libertarian paradise where everyone rises and falls on their own merits, and where charity is meted out by private parties and the government steers clear. I hope that now we can just accept this and move on.
UPDATE:
9/24/08
Interesting footnote: An open letter from prominent economists to Congress.
Also, I really am serious about being persuaded by someone smarter than me (in layman's language, of course) why the bailout is a good idea. The rant is for provocation and good blog copy, but I'm still open to new perspectives.
Subscribe to:
Post Comments (Atom)
10 comments:
Well, then. Okay. Anyone not clear on Joe's feelings about this topic?
I really liked "welfare in a tuxedo".
Ha! You're funny. I don't know what should be done, but blast it all that we're in this mess.
And I'd like to be the Grand Poohbah of something, or maybe the Grande Poohbaher of something. Because 1) it sounds important, and 2) it made me laugh. Okay, and 3) I think I deal with something like Poo(h optional) in many forms on a daily basis. Which certainly qualifies me.
Can I draw a halo and wings on guaranteed basic healthcare? Or maybe a moustache and thick-rimmed glasses? And I think I'd like my welfare in sarfari riding knickers with a panama hat and a cockney accent--balancing a platter on one hand with little seaweed spam rolls stuck with colorful toothpicks.
Spam for the masses!
Joe for PREZ! You've got it where it counts, Plicka!
Joe - Hey, we're totally stoked about you coming to visit!!!!!!!
Thanks for saying what nobody else seems to be admitting... that this whole bailout stinks to high heaven.
That said, things are going from bad to worse, although I'm not convinced it's happening as quickly as democrats say it is.
Nonetheless, it's the little guys that are getting hurt now. Waitresses who's income has dropped in half because of significantly decreased tipping, and not just autoworkers are getting laid off, etc. The sad thing is that trickle down theory is indeed an evil but intrinsic ingredient in this rotten thing called capitalism.
I've certainly experienced it in my business and I had to start another business to keep from going bankrupt.
I also TOTALLY agree that those to blame should NOT be allowed to profit on the bailout. In order to qualify for the bailout banks and investment institutions must agree to terms that will finally force them to be honest (like firing of guilty investment managers, no-golden-parachutes, and gross-income limits for managers).
Frankly I'm disgusted by what I see in both Obama's and McCain's campaign leadership - who are just the kind of people who are responsible for this mess, blaming "Wall Street" instead of blaming the Leadership of financial institutions who rewarded loan officers for issuing bad loans. It does not bode well for the future regardless who is elected. Once elected I'm afraid all the talk about change won't amount to much - just like when the congress went from Republican to Democrat. No change.
Anyway, back to your point: I think we're already in a recession and without a bailout we'll risk an economic depression - and a global one at that. It will be worst overseas, and turmoil over here will not be as great though it will be quite bad.
Even though a depression would make houses seem more affordable, nothing's affordable when banks refuse to loan money.
In short, I think that without a bailout the only people who will qualify for a mortgage within the next 5-10 years will be those with no-debt, 10% down in a bank, and a solid history of a good paying job in a stable industry. That pretty much rules out everyone.
I thought I'd add ... the letter to the Speaker of the House from University Economics professors worries me a tad. It suggests that instead of buying out AIG, the government itself will become a lender to keep lending alive and keep the economy going, while not rescuing poor investments.
The thing that worries me is that although that makes more sense from an economical standpoint, and as one of fairness, it seems to belie the fact that the government then becomes your lien-holder.
As if government isn't powerful enough already ... although the risk is low of them unfairly foreclosing on property, if they wanted to there would be nothing to stop them since legally they'd own the property.
Merely owning a majority stake in an insurance company is no where as risky it seems to me.
Maybe there's something I'm missing there, and if so someone please point it out to me.
Wasn't the depression the result of "taking the risk" under President Hoover's administration?
Anonymous: I don't know, was it? You tell me. I honestly know nothing about Hoover and what led up to the 1929 crash.
Is a Great Depression likely, or even possible this time around? We live in a pretty different world now. Are we talking about some hard times? Possibly, probably. Are we talking about Tom Joad, Oakies, the Dust Bowl and a nation with no safety net for the most vulnerable? No, I have a hard time thinking that people are going to be starving and living in tent cities.
I don't know about a "Great" Depression. I mean ... what was so great about it? Seems like it should have been called "The Disasterous Depression", or the "Sucks-to-be-alive Depression".
I remember my host mother in Germany once calling America "great" which shocked me until I realized she was referring to the size (1983 ... Europeans didn't think much about our country and policies back then either).
We're already in a recession ... I don't know what the definition of a depression is, but I suppose it's what's next. Maybe first we'd slip into a "Great Recession", though I'd prefer if they'd come up with a more suitable adjective than "Great".
Joe,
I commented on my blog. Check it out & let me know what you think... It doesn't really do much convincing, but it more explains how I feel about it.
As far as recessions and depressions go, we're not in a depression now, and we may NOW be in a recession, but until this past week we haven't even been receding... it's just a fun buzz word. The economy has continually grown (albeit slowly).
Anyway, loved the post... I like economic Plicka.
jml
Next up... PhD in accounting.
Post a Comment