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By jdb, November 11, 2009

I don’t mean to advocate blind acceptance of the situation. Only a calm objectivity. If you’ve got a patient on the table and his guts are spilling on the floor, it’s not the time to think about curing the underlying disease or giving him lessons in nutrition. You’ve got to sew him up so he doesn’t die. That’s the priority.

When the Bush administration first approached the financial crisis, they were going to buy the bad assets – but I think it was too late for that. What they ended up doing was swallowing a bitter ideological pill and just giving the banks some money. That scares the hell out of me, not because I think they were rewarding their friends for being dipshits or whatever, but because the money that wasn’t used to acquire banks that were basically dead outright was needed as operating capital. It got them through Christmas, and hopefully through the bottom of the financial markets. What that says to me is that those banks were weeks away from complete collapse.

So I think the bailout was 100 percent necessary, and nothing would get done in terms of reform if it hadn’t happened. You can’t re-engineer jack shit if you’re broke, and a good chunk of the third world is one hundred percent dependent on those banks being solvent. Famine, anyone? The entire world is intertwined with those banks. I don’t think I’m overstating the case when I say that, given how interdependent and ‘globalized’ we are now, if there is deep depression in this country, then there are parts of the world that would experience famine and plague. I say do whatever we have to do. I don’t care whose fault it is, all hands on deck! There is a hole in the boat and we can worry about shouting matches later. It might not be the boat I want to be in but that doesn’t mean I want it to sink.

Without the bailout money, Wachovia would have gone under, and let me tell you it would have cost a lot more to fix that one! All that FDIC insured money, you see. I don’t give a piss about some fat cats bonus, it’s a drop in the bucket, and if you have to prime an engine to keep it going so be it. I’d rather have a different engine but that’s the kind of thing you have to build first then put in, especially if you need the thing to work.

Speaking of engines, I think the ‘bailout’ of the auto industry is necessary even though it preserves the status quo – a drawback that people are rightly upset about – because right now our industrial capacity is only half used, and if the gov. didn’t step in and buy big chunks of it, it wouldn’t be there later. If our transport network even hiccups we’re pretty much screwed. Even if other nations were able to buy a lot of it up, I’m not sure that’s a good spot to be in. I think it’s for the same reason we subsidize grain and basic foods – and other countries do as well. You don’t want to get into a situation where you have to import all of your food.

But I digress. Now that patient, the economy, is stabilized, it’s time to set up a program for healing. Unfortunately, I think there are some people in Congress who are far more aware what the situation calls for then we are, and they are playing politics and fueling populist anger in order to grab for their lost power – regardless of what is best for the country. I think this is more than gauche, this is dangerous. Because they are opposing the kind of regulation that will keep the system they are attached to from failing completely in the future.

I’d like to see regulations that make it more profitable for banks to be smaller, help small banks out, that prise apart consumer and investment banks more permanantly this time so Republicans can’t mess it up. I’d like to see a new international currency system that limits trading. Maybe an international standard for Alex Jones to get an ulcer about. Hopefully 10 or 12 years down the road we can have a more sustainable system, more able to withstand shock. Over time, it could be reshaped and no one has to shoot anyone else or go hungry.

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By jdb, April 2, 2009

A prevaling belief is that banks got a bailout for making a mistake, and that we already payed for their mistake and shouldn’t pay double. Many believe we should let them fall. I understand feeling that way, maybe the bankers still have jobs and retirements and some of us don’t,  but the problem is so much larger than questions of fairness.

When the Bush administration first approached the problem of the ’ailing’ financial industry, they were going to buy the bad assets – but I think it was too late for that. Then, the government was going to give them some money so they could make loans directly. It was too late for that too. What they ended up doing was just giving them some money. That scares the hell out of me, not because I think they were rewarding their friends for being dipshits or whatever, but because the money that wasn’t used to acquire banks that were beyond saving was operating capital. What that says to me is that those banks were weeks away from complete collapse. You can’t loan money when you can’t keep the lights on. The bailout package got them through Christmas, and hopefully through the bottom of the financial markets.

The entire world is intertwined with those banks. I don’t think I’m overstating the case when I say that, given how interdependent and ‘globalized’ we are now, if there is deep depression in this country, then there are parts of the world that would experience famine and plague. I say do whatever we have to do, at home and overseas. I don’t care whose fault it is, all hands on deck! There is a hole in the boat and we can worry about shouting matches later. It might not be the boat I want to be in but that doesn’t mean I want it to sink.

That being said, I think there are some people in Congress who are far more aware what the situation calls for then we are, and they are playing politics to grab for their lost power. I think this is more than gauche, this is dangerous.

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By jdb, October 1, 2008

Unfortuneately banks have become the sole engine of commerce AND government. If they go, people who have little will have even less. So we need some kind of bailout to kickstart the thing… The disappointing thing about these bills is that they don’t reinstate controls on investment, the abandonment of which got us into this mess in the first place. Also, there is no reciprocity with the taxpayer – we pay, that’s all folks. We should loan them the money at interest or demand a stake in their companies.

Overall, we rely too much on banks to allow them to do whatever they want – to invest our money in whatever fly by night scheme they glom on to that year. If they get to hold the money, as the worlds treasury, there are some obligations they have.

More than that I think we need to look for ways to decrease our reliance on banks and the reserve system, in government and commerce. The obvious way is to kill the govt.’s debt – we were well on our way to having that taken care of but of course, guess who messed that up?

Which brings me round to the bailout plan again. It seems it will pass with all of the senates tax breaks attached. Thereby making the debt even worse. Thereby borrowing more money from the same banks we are bailing out.

How is it that we elected Democrats to both houses and they still act like Republicans? But that’s another topic.