i’ve lived long enough now to have seen the economy rise and fall a few times.
and i’ve seen relatively isolated crises averted. a mostly contained sector of the economy, as with the savings and loan crisis. or one large company, as with the long term capital management hedge fund collapse.
but this latest business seems endemic, with tentacles reaching into every sector of the economy. add in americans’ insatiable appetites for stuff and fun and fiscal irresponsibility, funded by chinese investment in our country, and it seems like a recipe for disaster. the bear stearns bailout is probably just the tip of the iceberg.
here’s one thought about the bear stearns bailout:
This is the most radical change and expansions of Fed powers and functions since the Great Depression: essentially the Fed now can lend unlimited amounts to non bank highly leveraged institutions that it does not regulate.
great. our taxpayer dollars going into a bottomless hole over which the government has no control, with no end in sight.
and here’s another sobering thought:
The people who made tens, perhaps hundreds of millions of dollars over the last 5 years are not at risk for those earnings. If shareholders and managers are bailed out, we’ll have privatized the profits (false profits based on loans that were clearly bad) and socialized the losses. We will have rewarded the people who manipulated the financial system, at the expense of ordinary consumers.
oh, ok. so our tax money isn’t really going into a bottomless pit. it’s going into the pockets of the people who created the mess, and profited from it, in the first place. big-time republican donors, no doubt.
and finally, this:
“Maybe it’ll turn out that all this Wall Street stuff is just less important than we think it is,” he says. Let’s hope so.
“this Wall Street stuff” is what passes for pensions these days in America.
that’s your 401k going down the drain for the foreseeable future. still think we should privatize social security?
maybe i’m being too pessimistic. maybe i’m just older and more aware of things now.
but this situation has me scared.
update: if all that’s not enough, read this article and the comments as well. excellent summary of the problem, with knowledgeable folks chiming in. there’s no end in sight here.
