September 26, 2008

MORE BAILOUT

Emily pointed out that Cass has a lot up at Villainous Company about the bailout. In her post I found this insight from Jim Manzi:

I’m not sure how many people realize how close we were to the wheels coming off at about noon yesterday, as major commercial-paper processing banks like State Street lost 30% – 60% of their value in about 2 hours. Want evidence: When was the last time you heard of the U.S. government identifying a problem, developing a multi-hundred-billion-dollar program and announcing it within about 48 hours?

Does anyone else feel sick to their stomachs? Especially when you read the last line of Cass' post?

If after all this, you are somehow trusting in the rationality of your fellow citizens, may I direct your attention to lemming-like behavior in the face of a non-crisis which nearly brought our entire financial system to its knees and this utterly inexplicable reaction.

Your fellow voters are about to vote you more "affordable housing". It's like deja vu all over again.

Posted by: Sarah at 05:24 AM | Comments (2) | Add Comment
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1 So my degrees were basically deep into the economic structures of lesser developed countries specifically Latin America. When you had mentioned the "basics" of supply and demand regarding price gouging, I believe the same ideas can be applied to this situation. A bailout is what several other countries throughout history have done to save their economies, but instead caused hyperinflation. I've studied it over and over and over again in economic development classes. When a country pours unnatural capital into their system it causes false security. In every other country in history that has used this method, this has FAILED. Failed miserably. It is a poor idea. People lived beyond their means and need to pay the price for it. In every other situation, people would suggest homes being repossesed. Why not now? This idea is reverting back to 1980's style economics where they thought financial captial was the only way to save an economy.

Posted by: Sara at September 26, 2008 05:54 AM (SZeN8)

2 ^^^ I agree with you, Sara. One of the things I am most afraid of in this situation is the risk of huge amounts of inflation. That scares me silly.

Posted by: Emily at September 26, 2008 06:54 AM (cZoqf)

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