WOw… I have never seen such a biased media outlet… all day complaining about how this stupid bailout to save the world was not passed and how much it is “necessary.” We might as well believe that we need to “save the cheerleader, save the world.” Go ahead… print all the money needed and send it abroad…We will see how much saving we need and how much all this money helps when the US dollar is completely worthless. Did anyone else notice that this so called bill does NOTHING to explain how the problem will be solved? “Mr. Chairman, I believe that our economy faces a bleak future, particularly if the latest $700 billion bailout plan ends up passing. We risk committing the same errors that prolonged the misery of the Great Depression, namely keeping prices from falling. Instead of allowing overvalued financial assets to take a hit and trade on the market at a more realistic value, the government seeks to purchase overvalued or worthless assets and hold them in the unrealistic hope that at some point in the next few decades, someone might be willing to purchase them. One of the perverse effects of this bailout proposal is that the worst-performing firms, and those who interjected themselves most deeply into mortgage-backed securities, credit default swaps, and special investment vehicles will be those who benefit the most from this bailout. As with the bailout of airlines in the aftermath of 9/11, those businesses who were the least efficient, least productive, and least concerned with serving consumers are those who will be rewarded for their mismanagement with a government handout, rather than the failure of their company that is proper to the market. This creates a dangerous moral hazard, as the precedent of bailing out reckless lending will lead to even more reckless lending and irresponsible behavior on the part of financial firms in the future. This bailout is a slipshod proposal, slapped together haphazardly and forced on an unwilling Congress with the threat that not passing it will lead to the collapse of the financial system. Some of the proposed alternatives are no better, for instance those which propose a government equity share in bailed-out companies. That we have come to a point where outright purchases of private sector companies is not only proposed but accepted by many who claim to be defenders of free markets bodes ill for the future of American society. As with many other government proposals, the opportunity cost of this bailout goes unmentioned. $700 billion tied up in illiquid assets is $700 billion that is not put to productive use. That amount of money in the private sector could be used to research new technologies, start small business that create thousands of jobs, or upgrade vital infrastructure. Instead, that money will be siphoned off into unproductive assets which may burden the government for years to come. The great French economist Frederic Bastiat is famous for explaining the difference between what is seen and what is unseen. In this case the bailout’s proponents see the alleged benefits, while they fail to see the jobs, businesses, and technologies not created due to this utter waste of money. The housing bubble has burst, unemployment is on the rise, and the dollar weakens every day. Unfortunately our leaders have failed to learn from the mistakes of previous generations and continue to lead us down the road toward economic ruin.”
Nice. Except the part about “The great French economist”. Did you mean the best of the French economists?
It is from a Ron Paul speech: http://www.smallgovtimes.com/2008/09/ron-paul-bailout-is-a-slipshod-proposal/#more-820.
I couldnt have written this any better myself. I would change just one sentence. Instead of the following, “The housing bubble has burst, unemployment is on the rise, and the dollar weakens every day.” I would write “the tech bubble bursted almost a decade ago you morons. so move the F*uk on.”
so what do you propose we do?
that is why we have bloomberg
I think it’s damned if you do damned if you don’t. The original poster’s quote has a nice bead on the problem, but (and it is a big fat hairy one) that is not whole story. The fed can still spend that much and more in small, unmanaged or unguided increments which do not need federal approval. It has already shown its willingness to do so.
Not really. The Fed can monetize the problem which is somewhat different than taxing it away.
Try watching the Fox Business Channel for more than 15 minutes. It will make your eyes bleed.
I saw 5 minutes of Cramer at the Gym last night. Basic synopsis: Sell everything! World is coming to an end!!
Funny they said all letters were against the bailout even from “small businesses”
Just yesterday? You have a stronger stomach than me.
The guy with the “house is on fire - who is to blame? - let us put out the fire first” analogy was just too painful to listen to.