Bailout Hut

[boffo]

Most politicians and people in the media seem to think that the financial bailout is absolutely necessary to prevent our nation's (and the world's) financial collapse. But most ordinary citizens don't think this is true, and see the bailout of a massive expropriation of responsible people's wealth to be transfered to rich sociopaths and

Comments

[madbard]

Since you didn't friends-lock this post, do you object to people linking to it?

[boffo]

Go ahead.

[kittenrae]

cool. I'm also interested, since you have a background in economics, what your personal thoughts are on the situation.

[boffo]

I honestly don't know. This isn't an Economics issue. It's a High Finance issue. And I'm not an expert on High Finance*.

My friends Skan and Dean know a lot more about Finance than I do, and they both say the bailout is necessary. But then, they work in the Finance industry, so they're not exactly unbiased.

In general it's hard to know what to think about this issue, because there's no good way for a layman to tell the difference between someone who knows what he's talking about, a crank who only thinks he knows what he's talking about, and a partisan hack who's deliberately spouting misinformation. And even then, many of the people who know what they're talking about will disagree. What's the layman supposed to think?

* The relationship between Economics and Finance is kind of like the relationship between Physics and Engineering. A physicist wouldn't be able to design a helicopter rotor. An engineer would design that, using the theories that the physicist developed.

[crasch]

Well said.

[jordan179]

I understand economics and think that the bailout is a really bad idea because it insulates those who made mistakes in the market from the consequences of their mistakes, while penalizing those who did nothing to deserve it. Furthermore, by trying to spread the damage through the system it trades the certainity of a recession for the possibility of a depression.

Better we take the hit and move on than that we try to cushion it and risk falling over completely.

[magdalene1]

This is one of the most intelligent things I've read on the bailout to date.

Especially when it's a BE AFRAID AND DECIDE RIGHT NOW! scenario. If Bush OR Pelosi said "Russians have attacked Kansas and we need to retaliate" I'd want to see the smoking crater and the geiger counter readings and the hammer and sickle on the side of the missile before I'd trust 'em.

[ernunnos]

Standard high pressure sales tactic. The only correct response to someone trying to sell you something while screaming "YOU MUST ACT NOW!" is "Ok, see you tomorrow." If you can't afford to sleep on it, you can't afford it.

[robbbbbb]

Hey, guys: Don't just do something. Stand there.

[billhauk]

I largely agree -- except for the comparison to the Manhattan Project. Except for a handful of influential Congressmen who were able to add stuff to appropriations bills without anyone asking questions, nobody even knew that the government had asked for money for a Sooper Sekrit weapons project. It wasn't like the White House actually put stories in The Onion about the nation's top scientists being on a camping trip in the desert. And one would have to engage in a bit of revisionist history to argue that Republicans trusted FDR to actually do what was in the best interests of the country.

[boffo]

Fair enough. But the larger point is that people were more willing to trust the government when the government was more trustworthy. That people are not so trusting now is the government's fault, not the people's.