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On Sat, 27 Sep 2008 05:20:13 -0700 (PDT),
I've not even heard the likes of Bush, etc mention "depression": not certain
why you would.
Do you really expect the president to use word "depression" to make
things worse and start a panic?
If he and his spin-docs thought it'd serve their purpose, yes.
Whether true or not.
I used the word because this clearly
is the worst financial mess that we've had since the Great Depression
and the possibility for this to spin out of control is very real.
It has already spun out of control.
Washington Mutual experienced a net withdrawal of $16Bil in deposit
from panicked customers with money in their bank in the last 2
weeks. It's not too far fetched to imagine that spreading. With
credit drying up, banks failing, it's not too far fetched to imagine a
potential scenario where worldwide investors start to panic, pull all
money out of US institutions, start a panic in govt bonds, etc.
I don't even think that is the central issue.
The US now produces near nothing save WMD's and services. Wall Street
used to have numerous trusted financial institutions. NYC was the
"Money Center" of the world. As production in countries like China
and India has ramped up, foreign investment has become an increasingly
important component of the US economy.
Wall Street, as the foreign investors knew it, is gone. Never to
return. They have acted so irresponsibly that full trust will never
be restored, regardless of what the gov't does/doesn't-do.
Or why you'd think it would be avoidable.
Recessions are part of the normal and expected business cycle.
It's widely recognized that the Great Depression was so severe and
lasted so long because both the FED and the govt refused to take the
steps as it was beginning that would have mitigated it. In fact, they
what little they did was the wrong thing. Just about everyone
agrees that this is no ordinary recession.
1.) We don't even have definitive evidence of recession (yet), let alone
2.) Comparisons to the Great Depression are not the least bit
appropriate. Economic conditions then and now are very, -very-
The "bailout" violates the very free-market principles that these folks
purportedly worship. If that doesn't tell you something, you sho'ly,
sho'ly aren't listening.
I agree it's not desirable for the govt to do this. I believe in free
markets to the fullest extent possible.
So do they. But only when it is convenient and profitable for them.
But when the choices are
either doing something that could prevent a severe recession or
worldwide depression, or just standing by and letting this spiral, I'm
not going to let the country go down in flames because of
principle. It's not the first time this has been done. And in
the major prior cases that I can think of, ie Chrysler, Mexico, the
govt wound up getting all it's money back or actually turned a
profit. Also, consider that even if this just turns into a severe
recession that lasts several years, the resulting loss of tax revenue
to the govt could easily approach the $700Bil.
You assume a.) doomsday and b.) gov't spending, essentially the
nationalization of the investment banks mutant loan bundles,
will save us. It's just not rational.
You believe precisely what they want you to believe.
We've spent $1 trill on the war in Iraq. It seems to me, coming up
with $700Bil for this, with a good chance that much of the money will
be recovered, isn't unreasonable. If you're against this plan, as I
asked before, what is your plan? From the above, it sounds like it's
do nothing and let the chips fall where they may.
Very close to the mark, that last.
If practical, I'd support unbundling the loans, separating speculative
loans from those on primary residences. Let the former default, provide
some re-financing for foreclosures on the latter. And that's all. Maybe
I think that what most people don't understand is that the US gov't
has become quintessentially hostile to all US citizens save the
"financial elite". The (gummint) gloves are off ... and the brass knuckles
"Take Yo' Hand Out My Pocket (I Ain't Got Nothing What Belongs To You)!"
- Rice Miller, who probably never even _heard_ of GW Bush, John McCain.
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