Is Watching Atlasians Debate the Specifics of the Federal Financial Bailouts... (user search)
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  Is Watching Atlasians Debate the Specifics of the Federal Financial Bailouts... (search mode)
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Author Topic: Is Watching Atlasians Debate the Specifics of the Federal Financial Bailouts...  (Read 1742 times)
CARLHAYDEN
Atlas Icon
*****
Posts: 10,638


Political Matrix
E: 1.38, S: -0.51

« on: September 19, 2008, 11:03:45 AM »
« edited: September 19, 2008, 11:07:36 AM by CARLHAYDEN »

lunar continues to ramble

To me it's worse.  At least we can get the GIST of some kind of military strategy.  I doubt any of us here have calculated the derivations and calculus that takes place in any of these financial deals.  It is of my opinion that if anyone here knew the correct solution, they could be making hundreds of thousands of dollars in New York right now because the entire upper class of that city has plunged into chaos because no one is sure. 

This is a simple post, I think we all need to chill and sit back a little bit before we jump the gun and accuse the government economic team, PhD's all, of making the wrong decisions.  The financial network, which various other institutions depend upon is INSANELY complex and sometimes fragile and sometimes not.  It's not the sort of thing that you can just read an Economist or WSJ article on and understand more than fractionally.  Sometimes costs of bailing out companies seem bigger than they appear (we'll make the money back).  None of the costs are actually burdening current US taxpayers, China's more than happy to buy all of it.

Look, I'm not saying the feds are right, I'm not saying that they're wrong.  I'm saying I think we, the uneducated and uninformed masses, don't have the tools to make legitimate and in-depth criticisms of the specifics of this sort of policy-making.

I think we can authentically criticize the overarching values (should we put business responsibility over societal utility, even if it would cause a depression), but when we start getting into the details, is it too early to cry foul?

Discuss (or not).



Yes Lunar, you do ramble.

However, you get everything wrong!

First, the whole idea of the bailout is fundamentally wrong (no need to get into specifics).  What it amounts to is the taxpayer will bear the costs of the insane activities of a few wastrels.

Second, I was on record months ago here telling everyone that the economy was going to be a disaster.  I specifically noted that whoever is the next President will inherit such a disaster.

Third, many of the schemes concocted on Wall Street are complex simply for complexity sake.  Their only purpose is to be so bizarre and insane that anyone trying to understand them will give up.  Their only purpose is to cover massive fraud with a heavy layer of manure.

Fourth, capitalism requires that people not only prosper from making good actions, but suffer for taking ill considered actions.  Well, with the bailouts we have eliminated the punishment, except for punishing the innocent taxpayer. 

Unless the bailout mania gets stopped cold, the economy will go into the toilet. 
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CARLHAYDEN
Atlas Icon
*****
Posts: 10,638


Political Matrix
E: 1.38, S: -0.51

« Reply #1 on: September 19, 2008, 11:06:22 AM »
« Edited: September 19, 2008, 11:12:56 AM by CARLHAYDEN »

Of course, of course. 

Say, politics.  I mean, when we say "Ooops, bad move Obama, that ad was awful" we know we are in a fog of war without access to internals or knowledge of his end goals.  We're making predictions about what will backfire or not which will be confirmed in the trackers in two days.  Also, collectively, we're actually qualified to be political consultants.

But when we say "Oops, bad move Bernanke, you shouldn't have bailed out AIG," everyone is acting as if they know every firm AIG is invested in and what the impact that move, or lack thereof, would have on the overall economy (hint, it probably doesn't only affect AIG and prob affects small businesses).

I'm just saying, before we call foul, let's wait a bit.  We can guess and that's fun, but let's not pretend like any of us are crunching the calculus on every firms' investments to figure out what the utility-maximizing decision is.  It's just like a war.  On the first day, it's sort of silly to start critiquing where Petraeus (or whoever) moves each brigade.  Afterwards we can.

Lunar, now you've gone and done it.  You've show you know even less about economics than the typical member of Congress.

Apparently you believe that the Chairman of the Fed owns everybody else's assets and can freely seize them to bailout those who engaged in massive stupidity (and in many instances, fraud).

Its really very simple.

Joe Tycoon screws up.

John Taxpayer gets his assets seized to pay for Joe's screw up.

John didn't ever know Joe.

So, no matter how "complex" Joe's screw up may have been, there is NO reason John has to pay for Joe's screw up.

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CARLHAYDEN
Atlas Icon
*****
Posts: 10,638


Political Matrix
E: 1.38, S: -0.51

« Reply #2 on: September 21, 2008, 10:31:01 PM »

Well said Lunar. I know this sounds arrogant, but given that I have no clue as to the merits of the bailout, the costs and benefits, and the risks created and avoided, I doubt anyone else here does.

Simple question.  Are those who made bad decisions being held harmless for their actions?  If so, is this the course of action of which you approve?

Another simple question.  Why should the innocent taxpayer be sacrificed for the bad actions of financiers?

Another question.  If we pay the "danegeld" this time, what's to prevent future bailouts?

In focusing on the everchanging minutiae of the proposed bailout you are concentrating on individual trees, and failing to see the forrest.

Oh, and if you like the details, perhaps you can tell me if you approve of having the american taxpayer bailout foreign banks (that's part of the current proposal - see Politico).
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