One of the biggest reasons that I am opposed to this bailout is that is becoming more and more obvious that this is way more about politics than finance or economics.
Last weekend we would have thought that we'd have armageddon on our hands by now if the initial Paulson Plan was not pushed "cleanly" through the legislature. Now that the public, the academic community, independent media and our political leaders have had some time to consider how to best deal with the crisis, and the world as we know it did not end, it is obvious that this "crisis" was engineered to at least some extent.
I'm not saying there are no problems, the problems are enormous and the consequences of ignoring the problems will be severe. However, there are many alternative plans making the rounds on the internets these days and virtually all of them are better than the initial plan floated one week ago today. Given another week or so of vetting these alternatives will lead to a better chance of properly dealing with Wall Street's crisis. Paulson and Bernanke were working on this plan for months before unveiling it last week, all the while telling America that things were not that bad (certainly nothing as bad as the Great Depression), the housing market is bottoming, and the U.S. Banking system is sound. Now we're supposed to drop everything and just watch as they engineer a massive transfer of wealth from the public to the very same people that got us here! (All while "earning" billions of dollars over the past several years.)
Oh yeah, banks that have largely stuck to banking, that is did not participate in the proliferation of Collateralized Debt Obligations (CDOs) or Credit Default Swaps (CDSs) - I'll try to explain these later, but suffice to say that they are a crucial part of the crisis - are doing OK. That is one reason why I like this plan.
On a completely different note, I have no idea how much of my intended audience is actually reading this blog. The idea was to sort of field questions and try to explain things as they came up. Since I'm functioning on limited sleep these days, my posts may ramble. Worse, I think, is that I have no idea if what I'm saying makes sense to anyone. When teaching in a classroom, it's pretty easy to tell if I need to back up and rephrase something. Please ask for clarification in the comments if something doesn't make sense, you think I may be wrong about something, or you just have a question that I'm not addressing.
I could also use feedback on the style of the blog. I could post quotes from all of these links along with my commentary, but that would add a lot of words to the posts. Anyway, I'm pretty much operating without a rudder here so please speak up if you've got an opinion on any of this.
Last weekend we would have thought that we'd have armageddon on our hands by now if the initial Paulson Plan was not pushed "cleanly" through the legislature. Now that the public, the academic community, independent media and our political leaders have had some time to consider how to best deal with the crisis, and the world as we know it did not end, it is obvious that this "crisis" was engineered to at least some extent.
I'm not saying there are no problems, the problems are enormous and the consequences of ignoring the problems will be severe. However, there are many alternative plans making the rounds on the internets these days and virtually all of them are better than the initial plan floated one week ago today. Given another week or so of vetting these alternatives will lead to a better chance of properly dealing with Wall Street's crisis. Paulson and Bernanke were working on this plan for months before unveiling it last week, all the while telling America that things were not that bad (certainly nothing as bad as the Great Depression), the housing market is bottoming, and the U.S. Banking system is sound. Now we're supposed to drop everything and just watch as they engineer a massive transfer of wealth from the public to the very same people that got us here! (All while "earning" billions of dollars over the past several years.)
Oh yeah, banks that have largely stuck to banking, that is did not participate in the proliferation of Collateralized Debt Obligations (CDOs) or Credit Default Swaps (CDSs) - I'll try to explain these later, but suffice to say that they are a crucial part of the crisis - are doing OK. That is one reason why I like this plan.
On a completely different note, I have no idea how much of my intended audience is actually reading this blog. The idea was to sort of field questions and try to explain things as they came up. Since I'm functioning on limited sleep these days, my posts may ramble. Worse, I think, is that I have no idea if what I'm saying makes sense to anyone. When teaching in a classroom, it's pretty easy to tell if I need to back up and rephrase something. Please ask for clarification in the comments if something doesn't make sense, you think I may be wrong about something, or you just have a question that I'm not addressing.
I could also use feedback on the style of the blog. I could post quotes from all of these links along with my commentary, but that would add a lot of words to the posts. Anyway, I'm pretty much operating without a rudder here so please speak up if you've got an opinion on any of this.
1 comment:
I think you're shedding a lot of light on a subject many of us are in the dark on! Many thanks and get some rest!
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