Here's Paul Krugman on Rachel Maddow's show bemoaning the failure of the bailout. He was one of the morons arguing the bailout MUST be passed. Now he's saying the bill was a terrible idea, time to go back to the drawing board . . . Ooh! He's angry! (Must be all that egg on his face.)
That trillion would have come in handy right about now.
2008-10-07
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3 comments:
I was one of those morons Douchashov refers to who said that a bailout was required to help unfreeze the credit markets.
I've been scouring this site for his suggested remedy (especially for the commercial paper crisis), but, strangely, I can't seem to find any. He probably wouldn't have been satisfied unless the plan included Card Check and complimentary internet porn kiosks on every corner, but we'll never know for sure--it's so much more fun to sit back and mock in retrospect (take it from me...).
What Mockrates said. If Douchashov and Pilsen Prole and Gunthram and all your SCA buddies want to take this financial crisis as an excuse to start the Revolution, please, let us know how you plan to go about it. And while you're at it, why don't you fork over that sweet big-screen TV the credit bubble bought you.
PS this does not count as whining.
Unfortunately, I'm suffering from a free-time freeze, so I will have to return to this. But, very briefly, the crisis is a result of behavior and the bailout is an attempt to shore up the consequences of the behavior, not an attempt to alter the behavior. Germanicu$ is hoping that if we click our heels and wish for faith in the greenback to be restored, that it magically will be and we can go back to living beyond our means. We can't. The bill is due, so do we pay it or try to pass it on? It's like a fucked up game of musical chairs and everyone's running around trying not to get stuck with the bag. Even China is afraid to bail us out because they figure they're going to go down the tubes with us. Either way, we get stuck with the bag, so it makes no sense to throw good money after bad to inflate a ruptured balloon.
You like my attention to detail? Congress and Bush put even less effort into selling the merits of the bailout. This was the argument: PANIC, PANIC, PANIC. This, tied with the Dems refusal to twist arms to own the bailout on the first pass, and the stories of billionaires losing a few zeroes worth of assets told the blapters (black helicopters) in my head that Congress was getting strong armed by their biggest contributors to prop up their balance sheets.
You ask for a proactive proposal. In a word, socialism:
Without studying details, the bailout was written broadly enough that Paulson can do anything he wants. That was awful, but perhaps the situation is terrible enough that he will be forced to do the right thing.
The so-called Swedish model that is now being contemplated (i.e. actually nationalizing the banks), but through a series of preferred shares a la Buffet. And I did address this towards the end of nut cutting time.. With the government earning a 10% return, the banks would work their asses off to buy those shares back, pretty much guaranteeing a win for the taxpayer. No additional taxes or insurance necessary, but with the questionable backing of the how-far-the-mighty-have-fallen dollar.
A nice sweetener for the right, split the shares into equal investment accounts for every American (with capital gains taxed of course) that could either be used to offset future tax bills or transfered to individual accounts for individuals to use as see fit.
This isn't enough. You might need to consider plans such as confiscating and auctioning or destroying vacant homes to help the toxic assets have some, any, value.
You would also have to roll back free trade to reduce the trade deficit. The ideology of living beyond our means is why "faith" will not be restored. A nice start in getting on track would be punishing off-shoring and out-sourcing, and that could be done immediately.
If the economic problem is truly fundamental, a govt. bailout won't solve it. And as we saw it can't even put a floor under it. You're first mistake was in assuming that the bailout was being considered in the best interest of the country. Looking for a quick fix is the cause of the crisis, so solutions need to be well-reasoned, forward-looking, and with the understanding that pain will accompany them. (I assume you can't say this in public, but standard of living will have to go down).
Although I'm not opposed to chipping in, I don't want to pay for someone else's nacho-caviar dip (I can barely afford my own). And that's why the country was livid at this bailout. I hope many of the people who voted yes pay dearly for it.
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