Letters to the Editor
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Well then you're arguing about class not about economics
What if the power company goes broke and the lights go out? Is a bailout appropriate then? What if your public employees pension fund goes broke and a million toiling civil servants can't retire, is a bailout appropriate then?
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All arguments are moot...
The USA has been digging this grave for decades... through both Repub and Dem administrations.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/17/ccview117.xml
Better have a plan B, kids.
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@angry insect
who wrote:
Well then you're arguing about class not about economics
What if the power company goes broke and the lights go out? Is a bailout appropriate then? What if your public employees pension fund goes broke and a million toiling civil servants can't retire, is a bailout appropriate then?
-- A Billion Angry Bees
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maybe we'd take you a little more seriously if you didn't indulge thoroughly intellectually dishonest drek like this.
comparing a power company to a bunch of pirates who risk sinking their ship for profit, then their ship is holed and sinking because of really bad strategy, is just not credible.
The argument is not between class and economics. It's an argument about public policy. Power companies are generally heavily regulated for the very reasons you cite (re: remember Enron????)...and mortgage banks should have been too.
I've been arguing for months now, along with a number of far more expert financial managers, that when this shitpile of bad debt began to hit the market, it should have been allowed to unwind naturally. Then, the major stock indices could have started to put in a true bottom, and we might well be getting ready for another long rally, with the debt unwound.
Instead, because of disasterously non-existent regulation, mortgage lenders and bankers got themselves into boiling water for potential profit, and the Fed comes running in AFTER the fact lower the temperature of a raging fire with a glass of cold water.
It's totally insane, and makes sense only if you figure that one set of rich guys is helping another set of rich guys so they all don't end up looking like the criminals they are.
This is not the natural interaction of government and the economy. It's a big con that went horribly wrong.
and if you suppose that the interaction of government and the economy has ALWAYS been a big con, I won't argue. But I will suggest that competent corruption generally does not include a giant red flag saying "we fucked up royally at your expense, for our profit, sorry we made it so obvious!"
The least we could ask for is competent corruption, you know? And more discreet corruption. Just as a matter of simple civility. If not public policy.
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This situation
How alarmed should we be?
If this as bad as Digby implies, there will be soup lines and 40% unemployment in a few months. If Kunstler is right, people will be lined up outside banks like opening night at a Star Wars film.
And no, Bush is no FDR. He's not even Herbert Hoover. And we can't trust the Dow average because it only measures 15 or 30 companies. The S&P or the NASDAQ qould be a better barometer.
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What is the difference between a recession and a depression?
1. Is a recession just a mild depression or did the government just decide that the word "depression" was too, well, depressing, and start calling them "recession"'s?
2. What are the odds of our moving into a "depression" as opposed to a recession (should such a distinction exist)? What are the implications of a severe recession/depression for the economy? Are we talking 1930's or 1990's?
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Oh I really don't care if you take me seriously or not.
I make a living as a professional economist and risk manager. When all your 'good' companies are solvent and all your 'eeeevull' companies are broke, I'm sure you'll feel that it's all worked out for the best, even if you happen to be living in a packing crate. The problem with trumping financial econometrics with your morality is that you wind up moral, pure and homeless.
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By the by
This apocalyptic doomsaying is no different than what we heard in October 1987 (also note that the CMO market THEN actually collapsed in April 87 not October). All sorts of things were guaranteed from depression to famine to America as a third world backwater. In fact economies are somewhat more resilient than that because the doomsayers tend to stay on the sidelines Cassandrizing and promising the Black Doom. Are we in a recession? Yes? Is it the end of civilization and will cannibals roam the roads and prairies? No, not yet.
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@A Billion Angry Bees
"I make a living as a professional economist and risk manager. "
So how did we get into this predicament? What could we have done to avoid it? If we somehow survive this disaster, what should we do to avoid another one like it?
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I get the angry part now
Other than putting words in peoples' mouths and launching ad hominen attacks, I'm still waiting for a substantive answer to some serious questions that were raised here. Are you for or against government bailouts of failing markets? When? If we can all agree that letting the electric company fail is bad, does that then apply to Wall Street speculators? Does it apply to mom and pop stores wiped out by Wall-Mart? Does it apply to workers losing their jobs in the manufacturing sector? How do we judge? How do you judge? Why?
We know who profitted by the repeal of all that banking and securities regulation. Do they have to pay now that they bet wrong? Should I pay for their mistakes via my tax money and via inflation? These are serious questions. You are obviously a bright person, although you lash out when you should be making a serious point. Rather than tell us how stupid and moralistic we are, maybe you should tell us who's going to pay for this mess and where the money is coming from.
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ah HAH
"I make a living as a professional economist and risk manager"
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well, well, well. that pretty much explains everything.
There's a profession with all kinds of credibility right now.
You won't have me to amuse you anymore. I have better things to do.