Monday, February 02, 2009
Financial Crises
Financial crises are not new. One could say that they are practically built into the system because of the lack of regulation and individual human greed which has its roots in never having one's need for more being met. When there is no civilized law, it comes down to "might makes right". When there is law and regulation, what then? Alan S. Binder in this New York Times article presents six choices that weren't made in hindsight that could have prevented or cushioned the impact of the current crisis.
In 33 A.D., the Romans had their own credit crisis as documented by Tacitus. It is not known if the instigators of the crisis were ever brought to justice, but the sole scapegoat was likely an "innocent" rich man whose wealth fueled the recovery. To be fair, we know so little about the Accused, we don't know if he deserved what befell him or not, though it is likely the charges were trumped up.
Perhaps if a few instigators of this mess fell out of their high rise penthouse apartments in Manhattan or "fell on their swords" in other ways, the average man, whom these same people likely hold in contempt, might feel that a little justice has been served. As it is, it takes a certain foolish and greedy genius to turn countless billions of dollars into countable ones. Such foolish genius should be rewarded with an entirely appropriate response, and should said fool survive the reward, that person should never practice banking or finance ever again.
As it is, the American and Chinese people are rewarding them and their stockholders for their failure. Joe Galloway noticed that TARP funds are being used to ensure that the banks are "too big to fail" as they buy more banks with that money. What are our leaders thinking? There are other ideas about how to solve the problem.
A new phase has entered the American vocabulary. It's called lemon socialism. It appears to be practiced by both Republicans and Democrats alike. The causes may be different, but the effect will be the same. With Republicans, it was idealogical. With Democrats, it is listening to either incompetent economists or banking lobbyists, or perhaps both. Meet the new boss, same as the old boss. (If Obama's not careful.)
In 33 A.D., the Romans had their own credit crisis as documented by Tacitus. It is not known if the instigators of the crisis were ever brought to justice, but the sole scapegoat was likely an "innocent" rich man whose wealth fueled the recovery. To be fair, we know so little about the Accused, we don't know if he deserved what befell him or not, though it is likely the charges were trumped up.
Perhaps if a few instigators of this mess fell out of their high rise penthouse apartments in Manhattan or "fell on their swords" in other ways, the average man, whom these same people likely hold in contempt, might feel that a little justice has been served. As it is, it takes a certain foolish and greedy genius to turn countless billions of dollars into countable ones. Such foolish genius should be rewarded with an entirely appropriate response, and should said fool survive the reward, that person should never practice banking or finance ever again.
As it is, the American and Chinese people are rewarding them and their stockholders for their failure. Joe Galloway noticed that TARP funds are being used to ensure that the banks are "too big to fail" as they buy more banks with that money. What are our leaders thinking? There are other ideas about how to solve the problem.
A new phase has entered the American vocabulary. It's called lemon socialism. It appears to be practiced by both Republicans and Democrats alike. The causes may be different, but the effect will be the same. With Republicans, it was idealogical. With Democrats, it is listening to either incompetent economists or banking lobbyists, or perhaps both. Meet the new boss, same as the old boss. (If Obama's not careful.)
Labels: Fixing messes
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Yes its a shame John
After the glaring failure of the free market that caused the 2008 meltdown it is rich, safe Reps and yes-man Dems who label anything interventionist as "lemon socialism".
Counting Bush's Iraq /Afghanistan allocations the US Defense budget roared up to $800 Billion in his second term but that wasn't seen as lemon socialist intervention - that was seen by Wall Steet as affordable, prudent and righteous money for the US economy.
Can Obama now afford such intervention via these War Machine cash injections?
Pete
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After the glaring failure of the free market that caused the 2008 meltdown it is rich, safe Reps and yes-man Dems who label anything interventionist as "lemon socialism".
Counting Bush's Iraq /Afghanistan allocations the US Defense budget roared up to $800 Billion in his second term but that wasn't seen as lemon socialist intervention - that was seen by Wall Steet as affordable, prudent and righteous money for the US economy.
Can Obama now afford such intervention via these War Machine cash injections?
Pete
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