Any chance of keeping that numbers from the bailout balance sheet post updated as they sharpen their red pencils after adding a few more bailouts with a bunch of zeroes at the end?
If a war/huge public works project will solve the financial crisis, why haven't the Iraq and Afghanistan wars kept this one at bay? Do we just need to attack someone who's not a 3rd world country for it to work?
What we should really do is bomb some major city into ashes, and then dedicate the whole country to rebuilding it. It would be so great for the economy! Think of all the extra work we would have to do just to get by.
For the long term, we should really think about some kind of ditch-digging law. For every hundred dollars spent by a person, that person should be required to dig a five foot deep hole. This would doubtless create a lot of demand for food, given all the calories people would burn, and if we allowed people to pay others to do it we could soak the rich and have virtually 100% unemployment for years and years. We could keep people occupied for generations and dig a new grand canyon with just this one bailout.
So seriously, gentlemen, quit casting aspersions at Krugman, learn some economics, get your heads out of that libertarian sand, and dare to dream!
Well, as we can see, the Americathon of Bailouts is not working very well. Again, let me suggest that the Pro Libertate Bailout Plan® is the superior option:
Pro Libertate | September 25, 2008, 3:39pm | #
I've been thinking about this for a while, and I think that Congress should vote to give the $700 billion to one individual, one person who can serve as a symbol for all of America. That individual, of course, would be me.
As I accept this money and live my life in the manner of a Greek god, America will be inspired and its confidence will be restored. The economy will bounce back completely on February 1, 2010, when I broadcast a message from my vacation home. . .on Mars.
concerned observer | November 10, 2008, 11:18am | #
And, of course, the wingnuts are denying that deregulation had anything, at all, to do with the financial crisis.
"What we should really do is bomb some major city into ashes, and then dedicate the whole country to rebuilding it. It would be so great for the economy! Think of all the extra work we would have to do just to get by."
Absolutely!
And we can improve international trade in the process!
We can buy one of these from the Soviets to get it done:
domo--It's deregulation! Don't you know any better?
What it is specifically and what it actually did aren't important. What is important is that the political class and their lackeys can assign blame using code words that the right people (wink-wink, nudge-nudge) understand all too well.
Picky details just get in the way of the narrative.
Domo, I'm sure there's gotta be one. Lots of laws get repealed all the time. The Federal register is 70.000 pages, I'm sure they must have deleted something at some point....
There is the commodities and futures modernization act (2000) signed by clinton during the lame duck session. Not Bushes bill, but def. done by the GOP. Only dealt with energy derivatives though, so pretty limited in scope.
Also there is Gramm Leach Blily that allowed commercial banks to operate investment banking activities. Also signed by Clinton, but was a GOP invention. It is also a bind alley for the deregulation story - since investment banks that didn't have a deposit base have suffered most in this crisis. If anything, it cuts against the deregulation arguments claims, since it allowed key stabilising mergers to happen as the crisis unfolded - as fmr. President Clinton has said.
And in the other corner we have Sarbanes-Oxley - actually signed by Bush. It's perhaps the most intrustive, and extensive reach of government into business ever signed.
In any case, the overall story of "deregulation" is one step foward, a 5k back. There is plenty of blame to heap on the GOP with regards to this mess, but deregulation isn't it.
I read a Krugman column yesterday (I'm not sure if it's the one linked to) which pretty much boiled down to: "Mister Messiah-Elect- Go long!"
There's nothing, apparently, Krugman doesn't think we should do, and nobody he doesn't think we should save. I'm going to start stockpiling Pall Malls.
The actual party line is not so much that it was "deregulation" but a failure to introduce enough new regulations to deal with the trade in derivatives and such.
IMO, it wasn't so much that even. The only true regulatory failure I can identify is the rating agencies failing to properly rate securities, resulting in a lack of transparency, so investors were unable to make rational choices. And even that isn't so much a regulatory failure as a problem caused by perserve incentives produced by other regulations.
To the extent the current situation counts as a "crisis", (and I see no crisis inherent in dumb bankers losing money and dumb homeowners losing houses), it was caused by government-induced perverse incentives and the law of unintended consequences. I never saw any real evidence that the credit market was about to "freeze" - I'm still getting credit card offers in the mail.
Maybe, says Paul Krugman, a World War II-size jobs program will turn the trick:
F.D.R. did not, in fact, manage to engineer a full economic recovery during his first two terms....
What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy's needs.
This history offers important lessons for the incoming administration.
------
Nick, I have no idea why you interpret Krugman's statement as a call for a huge jobs program. The clearly more straight-forward interpretation is Krugman is calling for the US to get into a massive war.
I wonder if the people will support the "Krugman Plan", which will involve the breaking of every window, mirror, windshield, and other sheet of glass in the country?
Didn't the Germans have a plan like that? "Krystallnacht", wasn't it?
Clinton is yesterday's news; the libs will throw him under the bus
I'm not sure of that. They like to point to the dot-com bubble under Clinton and claim that it somehow reflects positively on tax-and-spend policies, despite the fact that Clinton was thwarted by a Republican congress in most of his evil machinations.
Where is my bailout? With a mere 1 billion dollars, I could stimulate Las Vegas, liquer sales, and multitudes (multitudes I tells ya) of strippers, who risk being thrown into the streets nude. Undoubtedly, this would cause a great spurt of liquidity, causing emplyment to swell...and all Americans to come...together
Isn't it about time you ran away, waving your arms in the air and crying?
concerned observer | November 10, 2008, 2:15pm | #
If you people have failed to acknowledge that this crisis was caused by the party of deregulation, then it's pointless to try to change your minds. It's like trying to teach an idiot child to read.
CO, convince us. You can't come in here and spout platitudes you got from someone you heard and expect us to have a revelation. You say it's deregulation that caused it. Show us. Statements don't change minds. Facts do. So far, you've given none of those. And yet you're surprised. Huh.
The only true regulatory failure I can identify is the rating agencies failing to properly rate securities, resulting in a lack of transparency, so investors were unable to make rational choices.
There is a regulatory failure in capital requirements. I.e., the capital requirements if you hold onto your own mortgage is x% of the mortgage, but if it's securitized, then the AAA-rated trench only requires y% in capital requirements, and so on.
So there was regulatory arbitrage, in that securitizing mortgages into mortgage-backed securities could result in lower overall capital requirements.
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