That’s the headline of this AP article. “It was critical to arrest the downward slide in financial markets,” said Sung Won Sohn, an economist at California State University, Channel Islands.
“This could go a long way toward solving these problems,” said Mark Zandi, chief economist at Moody’s Economy.com. “Obviously there is a big upfront cost to taxpayers,” Zandi said, “but the ultimate cost may be measurably lower.”
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The really sad thing is, and what always tends to depress me, is that smart people who would abhor being in similar financial straits personally will advocate the government situation as necessary. This depersonalization of the crisis is one of the false beliefs that I am trying to address with my circle of friends and acquaintences.
There’s not much else to say, other than I am just so tired of picking up the tab for everyone else.
famers cannot add water to milk why can anyone add paper into our money supply. It is true that mainstream economists are sheep dancing to a piper and thus the people need to demand fair and honest dealing and a sound monetary system to reduce all tyranny to dust with words and logic.
Economists are the ones whispering in the ears of the ambitious politicians. Both of these, economists and politicians are ego-driven interventionists and both are easily persuaded by the unConstitutional coup to live the parasitic life weakening the host. The weakened host, the Constitutional Republic, stays alive only because it has remnants of a contractual economy based on property rights.
If the economy collapses there are two possibilities: totalitarianism under a global oppressive system run by a small minority (similar to the unConstitutional coup) or the rebirth of classical liberalism societies that shun the control of the ego-driven minority.
This is OT, but has the Mises Institute published a rebuttal to this article? If not, I would be grateful if you did.
“Why I Am Not an Austrian Economist”
by Bryan Caplan
http://www.gmu.edu/departments/economics/bcaplan/whyaust.htm
This is from a student of Rothbard who later rejected Austrian economics.
Larond – there are Austrian rebuttals to that article. Some are linked to here:
http://mises.org/Community/forums/p/3841/52609.aspx
The title of the article should have been “Economists” See Financial Bailout As Necessary.
Here’s a counter-opinion:
Economists becoming skeptical of bailout
http://www.politico.com/news/stories/0908/13689.html
The weird comedy of this is striking: the NYT needs to convince us to go along with the payoff, and the best they can do to speak for “economists” is someone from Cal State Channel Islands?
Larond, use Caplan’s article title in the “Search” tool on this site. Worked for me, also for other topics.
Fortunately, more notable economists are starting to voice concern.
To me this bailout feels like the bailout of the titantic where the boats are distributed based on the price of your ticket.
I think the common person is going to do most of the bailing while remaining left out of most of the rescue.
Titanic “Trickle Down†Rescue Plans: I’m From the Government and I’m Here to Help
at
http://bowyer.spaces.live.com/default.aspx
Titanic “Trickle Down†Rescue Plans: I’m From the Government and I’m Here to Help
at
http://bowyer.spaces.live.com/default.aspx
I wonder why that economist is not listed as part of the faculty at the school?
“Sung Won Sohn”
http://econ.csuci.edu/faculty.htm
Often, I find myself at the end of a proverbial spear. I speak of my personal problems quite often to friends and family and their response to my constant dwelling and venting is that I “should realize that the world is not all about me and my issues”.
Well, I find humor in this bail-out problem because the exact same people who would be saying the exact same thing are the ones complaining about paying fifty more cents to the government per paycheck.
Fuck all of you.
I am opposed to the term bailout. What is good for the goose is good for the gander. I believe the entire relief package should be a loan from the tax payers not a bailout. So, the taxpayers cover the loan, the recepients of the loan return the funds with interest to the taxpayers. I know when I am in a financial bind.., if I go to a bank for relief I dont get a bailout, nor is one offered. Why should this situation be treated any differently?
From a cause and effect perspective the effect is enclavement of the citizens of the US. The cause was created for that purpose. Mission accomplished.
This is article is ridiculous. The quoted “economist” is not on the faculty at the school. The Economics department consists of 3 people. I guess they couldn’t get an actual Economics faculty member to agree with the article.
Here is the opinion of ACTUAL economists:
http://mtippett.wordpress.com/2008/09/23/top-economists-question-wisdom-of-bail-out/
It seems that the government has officially moved into the business of buying trash with the nations money.
Right now, the market is sending a clear signal that we as a nation are carrying too much debt, and that the institutions that continuously loaned to people who couldn’t afford to pay back, made a mistake.
If the market is telling financial institutions that they should not be lending money to bank x or individual y, then they shouldn’t. Its that simple.
The market is telling the financial institutions, this debt is garbage, and its not worth anything. So you don’t get anything for it.” The market is saying “you messed up, don’t do it again. Don’t tell good people that they can afford houses that they cant, don’t underwrite fraudulent mortgages, and don’t lend more to good people that you know can’t afford more debt.”
The government is saying “hey we’ll pay you for this garbage with taxpayer money, its all good. Keep telling good people that they can afford houses that they cant, keep underwriting fraudulent mortgages, and lending more to good people that you know can’t afford more debt. Well just pay for it with peoples taxes.”
Every financial institution from here on out will have a clear incentive to underwrite trash, and sell it to the American public, at a profit in excess of any return which they might otherwise make through legitimate means.
Market pricing is the information that allows people to make valid rational decisions based on the true value of whatever is being bought or sold. The government is about to shut down the very market mechanism that is necessary to to see the US economy back on track and push financial institutions back into producing services which have true value to the public.
A FINANCIAL REVOLUTION PART II
A Modern day “Boston Tea Partyâ€, Americans all over America has gotten wise. Here is the American publics’ response to government, bailouts, stimulus packages and the putting us back to work to spend. The wizards of Government and Wall Street, through their greed and corrupt practices, have given us the people two options: risk destitution, foreclosure and bankruptcy or save. We’ve chosen to save. To save, save, save ourselves.
1. This isn’t working. The public doesn’t get information on what’s going in and what’s coming out of bills until the information is already out of date. We have no effective means of tracking and influencing the legislative process. Our participation is limited to whether or not we support saving the economy. We don’t have a seat at the table when it comes to the actual nature of making government work.
2. Whoever is in office be it Democrat or Republican makes no different. American government is about keeping the system going. The system is for the elite; corporate America, our elected officials and keeping capitalism alive. The masses of people are inconsequential and expendable at every level, rich, middle class and poor.
3. Let’s face Reality; the top 400 people in this country took in 250 million a piece each and every one of them for a year… ONE MILLION DOLLARS A DAY……or 100 billion for the year and paid less than 20% in taxes….and that was adjusted income,,,, What do you imagine their incomes were BEFORE the adjustments….
4. Wall Street is the CANARY in the COAL MINE… We will never make significant process until these people’s unmitigated GREED is alleviated by 94% tax rate….
5. The less you know, the less you care. The less you know, the more you believe. The less you know, the cheaper your job. The less you know, the weaker your opinion. The less you know, the easier you’re scared. The less you know the better pawn you are.
6. This is what the internet is all about! This is what transparency looks like! Put a million pissed off people with computers to work and stand back!
7. Judging a system only by the magnitude of profits is a fool’s assessment; capitalism as designed by free market fundamentalists, also, falls much harder when it fails, and it ALWAYS fails, as its design flaws make it impossible to sustain.
8. I am one of many unemployed Americans. I lost my job 10 months ago, and have yet to find employment. The harsh reality today is that I had 2 interviews for a long-term temp assignment, and still haven’t even landed a short-term assignment. I possess a graduate degree and have 9 years of direct work experience. The point of my comment is not to elicit pity; I am simply one of the millions of disillusioned Americans hoping for a better tomorrow.
9. Government tells us keep hope alive for that bridge building job or to pave roads. Who cares if you paid $100,000 for your education or what degree you hold?
10. American people, design stuff, manufacture stuff, construct stuff, grow stuff; create your own jobs. Human productivity, not financial manipulation.
11. I think we have to pull together. People on the lowest rung……they need the most support. If the gas prices go up, they can’t even get to work or feed the kids. They are looking at homelessness. Those who have stretched their resources and bought a house beyond their real capacity to guarantee repayment lured in by greedy bankers? They aren’t the worst who need to be saved. They took a bad risk.
12. A great way to put billions of dollars back into the economy via this stimulus bill, lobby for every Senator and Representative to take a 35% pay cut, every senator and rep receiving Soc Sec and drawing a congressional salary, give up Soc Sec, because that’s double dipping. Whittle down those aides and staff from 50 each to 5 each so these people can actually do the jobs they’re hired for instead of handing tasks off to a lackey. Also, cut off pensions for these losers. If American people who have lost all their pensions and the autoworkers who are being penalized for drawing pensions can do without, so can these moochers.
13. Alright everybody time to start calling our congress and senate.
14. For all of the pandering, the “moderates on both sides” are now getting ready to gut the budget, and prove that the only thing they believe in is a failed ideology of “supply side economics.” Cut taxes, raise defense spending, screw the poor.
15. This “bipartisanship”, “post-partisanship”, “new politics” is a complete and total failure.
16. For the Office of the President the people voted for change. But when it came to the Congress people voted for the status quo in both houses. The people in Congress are the same people who voted for the Iraq war, No Child Left Behind, TARP, etc. If you wanted change, you should have voted against your incumbent in the primary and general election. As long as the same people are in Congress we will not have change. 2010 you get another chance to do so.
17. We are still arguing Evolution and the rest of the developing world is investing in education, infrastructure, engineering and science. What do you expect in a highly competitive globalized business?
18. We are getting rolled by government. That has no experience in governing and it is showing. The lack of ability of government to pass a bill or negotiate with colleagues on an executive level civilly is showing every time key legislation needs to be passed. They have no idea what they are doing and so our congressional leadership is playing games and playing us like a fiddle…particularly with these catch phrase named bills where they through in the kitchen sink to be funded by us.
19. Could you explain how enormous government spending and borrowing from the Chinese will create long term private sector jobs?
20. We wouldn’t be in the position if we hadn’t gone heavily into debt to purchase sophisticated agreements that nobody really understood but seemed like a sure thing right up until they started destroying the economy. In the solution I see ominous reflections of the problem. Do we really know what we’re getting for our debt? Does anybody know if it will work? The answer is no.
21. It seems that most efforts to help the housing market are aimed at maintaining the artificially high inflated prices that are part of the problem. If you want to see home sales go through the roof, list a $100,000 house for $100,000 instead of $300,000 and watch what happens. Continuing to prop up these unrealistic home “values” only makes current mortgage holders’ ability to make their payments more tenuous (in this job market especially) and continues to price many prospective buyers out of the market entirely.
22. The real problem can be summed up with two numbers: Average price of houses sold in America in December 2008: $247,900. Average personal income 2007 (most recent data available): $38,611.
23. Hang onto your wallet…The states are collectively about 100 Billion in the red.
24. A tax rebate is tempting, but doesn’t change the bottom line, which is we aren’t making enough money to afford the housing bubble. Where I live $15,000 does not offset the fact that mortgages have doubled in a few short years. All this will do is lure people in who can’t afford it, and award those who can game the system. It will keep mortgages artificially high and we’ll need another boost down the road….
25. Doesn’t it seem that the bailout dollars will keep those sinking from going to the bottom and that then it will take even longer for the fail/rebirth cycle to run its course? Like the Phoenix that rose from the ashes, wouldn’t we need ashes before there could be an arising, and anything else will just prolong the misery.
American people while the old way of “storming the fort†was applicable in that day and age to signal revolt, this is modern America’s way, by us staging a “financial revolutionâ€. Not buying into the consumerism that keeps the cycle of abuse going.
We have seen our annuities shrink by tens of thousands of dollars, and likewise, the value of our homes. Of course we are not spending. We may never spend. One reason is that we are so ANGRY at the corporations. We are tired of being subjected to social engineering every time we enter a store, tired of cheap junk merchandise from China, tired of our government being bought instead of representing us, tired of the government being taken over by armband religion, tired of our healthcare, tired of lousy schools that are unaffordable, tired of bailouts which is really nothing but more robbery of the people, specifically, the middle class.
We have no representation, no free press, and no recourse of any kind, except, not spending. So, by golly, we are not spending. It’s practice for when we won’t be able to spend anyway, because the government will end up with every last cent that we ever earn anyway.
Congress, American government, consider yourself notified. Americans are no longer “buying†the swampland, of buy, buy, buy, or, consume, consume, consume. It is now save, save, save ourselves. Unless you start mailing out checks directly to the American people to help bail us out, to get us through this depression, expect it to go on for as long as it takes, to bring down the system of the elite. You left us no other recourse. We are no longer going along with the program (stimulus, relief, bailout, TARP or whatever you decide to call the next bone); you heard it, first, from us…
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