Bush says that if we don’t do a bailout, then we’ll get a recession. It’s tough to argue that, but. . . when there are huge financial mistakes, don’t you expect a recession? I’m unconvinced that a bailout actually averts a recession. It just costs more.
Brad Feld: “I reread Nassim Nicholas Taleb’ brilliant book The Black Swan: The Impact of the Highly Improbable
All of these talking heads saying that we need a bailout are empty parrots. Bernake and Paulson haven’t slept in days – they aren’t capable of rational thought anymore. Bush was never a problem solver. McCain and Obama are focused on November, not the long term.
I haven’t changed my mind. Let the failures fail. Let a million successes bloom.
First of all, the government shouldn’t be trying to prevent the normal operation of the business cycle. Recessions happen, as do depressions. They may be painful, but they are necessary. I’ve been reading about FDR of late, and the amount of lasting accomplishment that was achieved in those first 100 days was staggering (and ushered in an era wholly different than the one that preceded it). Seriously, go to wikipedia and look at that list, it’s incredible. I guess my oint is, the immediate future is bound to look very different from our recent past. And I would much prefer Obama (or McCain for that matter) shaping it than Bush.
Will the economy really stop?
Won’t the bad banks just got bought up by investors or other banks?
WAMU was just bought by JP Morgan/Chase, so I would argue that, unless there is a bank run of historic magnitude, failing banks should be allowed to fail and be bought out.
One worry is that the FDIC doesn’t have the funds to insure all the accounts that would be affected by a bank run of historic magnitude.
California community college enrollment has historically trended upward during recessions, so as long as the state of California stays solvent, I don’t mind a recession (I teach chemistry at a community college in the Bay Area). In fact, I’m rooting for a continued drop in home prices in the Bay Area. I hope that doesn’t make me a bad person. 🙂
I agree wholeheartedly with this sentiment. The government is supposed to proactively prevent sitautions like this through regulation and oversight.
If they want to do something, they should offer education to people who want to understand the economics. After all, the public freaking out about a possible economic collapse is self-fulfilling. If only people realized that it’s not the end of the world the situation wouldn’t be so bad.
I think the reason the bill failed was not because congress suddenly got a conscience but because they are embarrassed about the exposure of their greasy palms.
Let the greedy homeowners who purchased well beyond their means, the morgage brokers who hoped someone else would take the brunt of their bad decisions, and the financial firms that endorsed this behavior get their comeuppance.
Four comments. Is this a new high for my blog? I think it is!
It sounds like we’re all on the same page, pretty much.