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cut nose, spite face


This bailout is pretty consistantly bringing out the worst in American armchair politics, from what I've seen. The "main street" argument is *primarily* (this does not mean there aren't very compelling reasons to contact your congressman in protest of the bill) "We shouldn't bail out these people who got themselves into this. They made their bed, they should lie in it." I hear it a lot, I hear it phrased differently and with intonations on different parts of the phrase, but...that's not really an argument, or if it is, it's an argument based more on spite than self-preservation.

I've heard some good arguments against the bill, but "physician, heal thyself" isn't among them.

I don't have much to say about it, the nation is really pretty 50% 50% on this no matter what the media is saying, and as per almost always, I don't feel informed about the economic system to make a decision. This is one of those cases where mellow, reasoned voices are just drowned out by outcry. It sure would be good if there was such a thing as an expert that people would listen to, but even the experts are divided.

I would like it if there was a clause in the bill that said something like "no CEO of a company benefiting from this $700b package will make a retirement salary greater than the financial compensation given to the mother of Jacob W--- during the year 2008."

Comments

fizzitt
Oct. 2nd, 2008 02:37 pm (UTC)
I make that argument, but it's not out of spite. It's that free-market economies work best if people who make poor decisions are allowed to fail, and if institutions are forced to change by changing economic decisions.

A bailout is appropriate under one of two conditions:
1. If the failure was due to bad luck rather than poor decision-making. But all down the line, people who should know better made decisions to repackage risk rather than respond to it. They undertook a risky-but-profitable venture, and they failed, and they should now be forced to restructure themselves in response to that failure.
2. If there is a compelling national interest to preserving the institution as-is. You can make such a case for the airline industry, I think. I'm not convinced that you can make that case for the investment-banking industry, but that's at least an argument you can make on facts rather than ideology, if you want to.

I'd have more sympathy if we hadn't stood and watched Japan's banking sector go through the same set of problems, in pretty much the same order, ten years ago.
spottylogic
Oct. 2nd, 2008 04:27 pm (UTC)
Again, I'm not particularly inclined one way or the other, in the absense of an "expert" opinion that's trustworthy.

I do like Obama's line that if your neighbor's house is on fire, you don't chide him for smoking in bed until the flame's out. The only real problem with that metaphor is that it's impossible to document how far those flames will spread. Sadly, we're dealing with a realm of known unknowns, and there's vast potential for disaster. It's a realm of threatening vagueness.

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