Spot On.
Well, President Obama has signed the bailout bill, for better or worse. You can see some excerpts of the speech he gave for the occasion here.
For a different President’s take on how to deal with a very similar situation, scroll to about 4:30 in this video and watch until the end:
I’m not the biggest fan of Ronald Reagan in the world, but what he says in that speech about individualism rings a lot more true than any of President Obama’s talk about the government riding to the rescue and saving us all from “catastrophe.”
Vincent:
I didn’t see your comment when I wrote that last post.
It seems like there is no silver bullet, but riding it out seems problematic due to the scope of the situation. That is, this isn’t just us…it’s everyone. So, sitting back and doing nothing is more difficult than if the problem was ours alone. If Lehman Brothers can almost topple the global market by itself, what happens when the rest of them go? That is certainly what would happen without, at LEAST, some clarification/instruction from someone telling these banks to start acting in their own interests and not try to plug solvency holes with employee bonuses.
Having said all of that, if this is going to be qualitatively worse and if we have no real control at this point…I wish they would stop trying to make us feel better by throwing more and more into the money hole and just pass out instructions on how best to prepare cheap food from readily available sources.
It’s not just Obama and TG though. Hell, Obama is the one who (so far) has refused to look at this situation through the lens of nationalization. The beating of economist drums calling for this though, seems to be increasing day after day.
Bottom line for me is, even if nationalization happened there is no real guarantee that it would help. Still, what has been done up to this point is not helping either. Sitting back on our haunches and waiting it out seems like a doomed idea as well.
A scary Catch-22 if there ever was one, but I would still rather err on the side of action in this case.
Chris:
That’s my point. Maybe there is no silver bullet. Maybe we just have to ride this one out instead of throwing those trillions at a market that’s going to do what it’s going to do regardless of how much we try to “stimulate” it?
I think investors want Obama and Tim Geithner to just back the hell off.
So, if the federal government owns 80-90% of a bank…
What ‘losses’ are left for shareholders? They’ve already tanked.
Question: Why should tax payers float bad investments in banks that are insolvent and only sticking around because of the big TARP band-aid?
If all-out nationalization is too scary (even though it’s already something we do here in the US for smaller banks), then it seems like something akin to it should happen temporarily? Or what?
People keep talking about the symptoms of this as if they’re just one or two things to get through, but it seems like the situation we are in is much, MUCH more than just housing bubble bursting.
We’ve already thrown 2 trillion at the problem and the market is tanking. What else do investors want from taxpayers?
More money I imagine. But for what?
Depends on how many times investors hear the words “catastrophe” and “nationalization” between now and then, I reckon.
How many % will the Dow fall tomorrow?
What’s so bad about inaction if “action” just means throwing billions at a problem that probably can’t be “solved” just to show voters you’re committed to “doing something”? It seems somewhat preferable to nationalizing banks and massively increasing the size and power of the government chasing after some magic solution that’s going to “fix” an economy that’s trying to sort itself out after the bottom fell out of a housing market that’s been out of control for god knows how many years.
In any case. a cursory glance at his record is enough to show that Reagan was no “small government conservative”, which is one of the reasons I’m so mystified at how people insist on treating him like some kind of conservative messiah even today.
Reagan was a great orator and maybe the right personality to have in the Oval Office at that point in history, but like most other politicians, he rarely lived up to his own rhetoric.
Perhaps all this talk of Obama being “the Democrats’ Reagan” isn’t so far off after all…
I’m not saying that either extreme is the way to go, but for all its pomp and circumstance, isn’t it just a statement of inaction?
What an astonishingly novel analysis.
Oh yeah, like the Laissez-faire mentality really works!
This speech and Reagan saying that government is the problem is great dark humor, thanks.
I also liked this part, “All of us together, in and out of government, must bear the burden”.
If D.C. could manage to separate itself from the great Capitalist endeavor, I think that we wouldn’t be in situations like this one. Capitalism is great, mind you, I just think that meshing politics and business in the way it has in this country creates the sort of thing we’re seeing play out now. And, of course, this uber-class of misfit assholes who have dragged us down into this mess get bailed out by us. I think there is plenty of room for responsibility and self-accountability for us tax-payers too, but smart people should be able to see the basic Math that Reagan is talking about when he speaks to the fact that Americans and America has been living beyond their means via borrowing. Credit isn’t even the beast, but the way it has been manipulated has been bad.
If you can’t count on people to act in their self-interest and you can’t count on the foundations of our economy to act in their self-interest, what do you do?