Christmastime at Walmart.
This is the bailout as advertised - buy up the junk bonds on taxpayer's bill so that maybe in a few years they'll be worth something and we won't be left holding a gigantic bag.
This plan was boneheaded enough that people were momentarily up in arms against it. That's incredible in and of itself. At least until the media return to the old standby of asking us to trust in the superiority of the thought process our political minds. And then the bailout passed.
But before Paulson could completely destroy us, Britain and the governments of Europe forced his hand, and he was somewhat forced into directly injecting cash into the largest banks. An unwanted loan in a time when everyone is refusing to lend. The idea was that this was supposed to ease the mistrust, to prove there was actual money there to back the loans and thereby free the banks up to loan amongst themselves again. This was the solution which the experts quizzed by Ira Glass had staked their hope upon. This American Life had swayed me.
Unsurprisingly in retrospect, the banks didn't start lending this extra money. They bought up some smaller banks, the ones that didn't get the money. They paid some VIPs they owed. They tucked the rest away for a rainy day. Loans still aren't being made. Quite a bit of our money is now sitting out there. We're back at square one, except the DOW is drunkenly stumbling and we owe more in taxes now.
-------
We cannot continue as we have for years, buying more, living on debt and hoping against hope that the bubble that is our entire economy doesn't burst. They always do. The whole world's economy as we can now clearly see, has also been banking on this ever-growing bubble. Even on an individual level - with the money people earn stagnating, more people getting older (more kids entering a shrinking job market, more seniors citizens needing ever increasingly expensive health care), the sudden jump in the last 20 years of personal debt isn't going to fix itself. So far the Federal response to this has been to ask us to dive a little deeper into our wallets out and keep this economy working. Christmastime at Wal-Mart. Like the Christians in my past used to quip "Give till it hurts."
I never took Economics. OK, I did, but it was a requisite course at a Liberal Arts college. So I don't understand how these things work at a higher level. Federal debt creation, leveraged insurance options, the fact that we owe China so much, I don't understand how these things interact, let alone operate.
The 700 billion was supposed to free banks up to lend again. People would cheer the action, and the media would reassure the majority of us that enough had been done. The stock market bought that hype for one full day. I'm glad the injection didn't save the plunge, as we might have just buried our head in the sand again. The US as a thriving economy is now necessary for the world to function. Fucking Friedman and his flat world. We're not addressing that. Our way of living is unsustainable. What options are out there?
------
The libertarian radio program I listen to is derisive to the extreme when it comes to FDR's New Deal. They claim it garners far too much credit for the turnabout. This is where I split with the libertarians anyway*, but what's the truth there? I only have a 3rd graders understanding of it all (high-school textbook level, anyway). Could an administration do a new new deal with any positive results? Green technology, sustainable small farms, science and math education, a new civil corp to rebuild the infrastructure, maybe this time with rails instead of interstate highways?
Is this a good direction? What other options and or thought are out there? Does the entire culture that creates CEO's pay at 500x the level of the average worker need reworked from a different angle? Would unionizing the big boxes help more than the hassle it would cause?
* hooray for personal civil liberties, but a total free market DOES NOT WORK you Ayn Randian assholes.
This plan was boneheaded enough that people were momentarily up in arms against it. That's incredible in and of itself. At least until the media return to the old standby of asking us to trust in the superiority of the thought process our political minds. And then the bailout passed.
But before Paulson could completely destroy us, Britain and the governments of Europe forced his hand, and he was somewhat forced into directly injecting cash into the largest banks. An unwanted loan in a time when everyone is refusing to lend. The idea was that this was supposed to ease the mistrust, to prove there was actual money there to back the loans and thereby free the banks up to loan amongst themselves again. This was the solution which the experts quizzed by Ira Glass had staked their hope upon. This American Life had swayed me.
Unsurprisingly in retrospect, the banks didn't start lending this extra money. They bought up some smaller banks, the ones that didn't get the money. They paid some VIPs they owed. They tucked the rest away for a rainy day. Loans still aren't being made. Quite a bit of our money is now sitting out there. We're back at square one, except the DOW is drunkenly stumbling and we owe more in taxes now.
-------
We cannot continue as we have for years, buying more, living on debt and hoping against hope that the bubble that is our entire economy doesn't burst. They always do. The whole world's economy as we can now clearly see, has also been banking on this ever-growing bubble. Even on an individual level - with the money people earn stagnating, more people getting older (more kids entering a shrinking job market, more seniors citizens needing ever increasingly expensive health care), the sudden jump in the last 20 years of personal debt isn't going to fix itself. So far the Federal response to this has been to ask us to dive a little deeper into our wallets out and keep this economy working. Christmastime at Wal-Mart. Like the Christians in my past used to quip "Give till it hurts."
I never took Economics. OK, I did, but it was a requisite course at a Liberal Arts college. So I don't understand how these things work at a higher level. Federal debt creation, leveraged insurance options, the fact that we owe China so much, I don't understand how these things interact, let alone operate.
The 700 billion was supposed to free banks up to lend again. People would cheer the action, and the media would reassure the majority of us that enough had been done. The stock market bought that hype for one full day. I'm glad the injection didn't save the plunge, as we might have just buried our head in the sand again. The US as a thriving economy is now necessary for the world to function. Fucking Friedman and his flat world. We're not addressing that. Our way of living is unsustainable. What options are out there?
------
The libertarian radio program I listen to is derisive to the extreme when it comes to FDR's New Deal. They claim it garners far too much credit for the turnabout. This is where I split with the libertarians anyway*, but what's the truth there? I only have a 3rd graders understanding of it all (high-school textbook level, anyway). Could an administration do a new new deal with any positive results? Green technology, sustainable small farms, science and math education, a new civil corp to rebuild the infrastructure, maybe this time with rails instead of interstate highways?
Is this a good direction? What other options and or thought are out there? Does the entire culture that creates CEO's pay at 500x the level of the average worker need reworked from a different angle? Would unionizing the big boxes help more than the hassle it would cause?
* hooray for personal civil liberties, but a total free market DOES NOT WORK you Ayn Randian assholes.
posted by Lord of the Barnyard at 10:59 AM
1 Comments:
I don't like unions. Imagine how little help you'd get at a big box if there was a union in place? No help. It'd be like shopping for a DVD player at Kinko's, you'd have to literally ring yourself up.
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