The Economy & McCain

[thisficklemob]

I'm no economic expert, but here are some links I've found helpful towards making sense of this bailout thing.

First thing to know is, they are utterly shameless. They wanna take $700 billion of your money, with no controls over what they do with it:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and

Comments

[xiaomi]

Yeah basically the real question here is whether or not this is a good use of resources and whether or not this constitutes a massive golden parachute for the banks. That's a serious question with serious repercussions - this would be more expensive than the Iraq war. But there's no coup going on here - it may be fraud on a massive scale, but this proposal doesn't challenge the fundamental workings of government.

Basically, people have to identify what can be done to save the economy without rewarding the banks, but the problem is that we're going into this after the damage is already done. So while "punishing" the people responsible for this sure sounds good, if all of the major banks go under simultaneously, we'll only be punishing ourselves - the economy will cease to function and we'll be back in 1929 again. The question becomes as much philosophical as anything else. You can bar using this money for compensating exempt (management) employees, but the banks can do a shell game and simply use their own money for compensating management-level employees.

At the end of the day, I think most people agree that these loans need to be somehow moved to the Treasury without creating golden parachutes, and without bankrupting major financial institutions all at the same time, and that Treasury needs to then offer renegotiated loans to allow these people to either (a) stay in their homes or (b) sell their homes in an orderly manner that doesn't involve a firesale. It's easy to say that we shouldn't have large companies that are "too big to fail," and it's also correct to say that, but right now we have large companies that are too big to fail.

I almost see it as treating tobacco-induced lung cancer. Yes, it's a huge outlay of money for something that was easily preventable - the patient could've simply chosen not to smoke. But the patient did smoke and now has lung cancer, and we have to deal with the problem moving forward - we can't go back in time and force the patient to stop smoking. We can, however, ban or heavily discourage smoking moving forward, and we can sue the tobacco companies in order to severely reduce their profit margins. But at the end of the day, refusing to treat the patient is not going to get you the result you want.

[kimbari]

Thank you. That was so rational! I wish more people talked like you.