parabéns pelo blog.
It's also a truth that has rightly put the Dark Wraith in a particularly pissy mood.
Oh my, I don't think we're going to agree on much of these types of things . . .
Glad you're back into it, though. Wasn't sure after our chitchat and your cheerful beach picture below!
I'll call ya this week.
MORE EXPLANATION FROM THE DARK WRAITH AS TO WHY THIS FED APPROACH SUCKS:
Wrote Oddjob:
While in no way disagreeing, I have a question, DW. If the Fed did nothing and allowed the consequences of their foolish choices to actually be visited upon the fatcats, would that create a situation worse for the poor & middle classes than the one we're faced with?
Posted on 08/12/07 at 09:11:40 • edit delete ban
Wrote Dark Wraith:
Good afternoon, OddJob.
At this point, as I noted toward the end of the article, the poor and middle class are going to get hurt in any event. It's only a matter of the speed with which the damage is going to be done.
More importantly, though, while public policy requires that action be taken, there's a vast difference between a bailout like the one that's going on right now and an institutional overhaul, which would start–not get slapped on as a half-hearted, maybe-kinda afterthought–regulatory reconstruction, civil and criminal penalties, laws regarding who may and who may not participate, and wholesale rejection of the myth of effective "self-policing."
While I'm at it, a whole lot of good is done for market focus on proper behavior when a truckload of individuals who caused this mess get put on public display in trials that end with rough prison sentences. And that means cleaning out the pigsty-excess mentality at heretofore non-transparent, largely unaccountable places like GNMA and Freddie Mac.
It also means turning Glass-Steagall back on with the same technologically sophisticated vengeance of 21st Century jackboots being put on private citizens; and it means making antitrust laws as they should apply to financial institutions something other than the antiquated, unused (and somewhat unusable) jokes into which they've turned over the past three decades. (That last matter requires, among many other things, that the myths surrounding the so-called "fiasco" of the breakup of Ma Bell be once and for all trounced into the dirt so we can get down to a realistic talk about well-planned divestitures and the necessity of permanent, follow-on oversight to ensure that reconsolidation not only doesn't occur, but is also economically undesirable by market participants.)
We have a slap-together quick-fix going on, OddJob. It's not going to solve the underlying problems, and we're going to have this happen again: sooner, the next time; uglier than this round, the next time; and quite possibly catastrophic, the next time.
I've addressed this matter in other political dimensions: we have all these Democratic candidates for President, and we have a Democrat majority in both houses of Congress, yet we hear not one word about a comprehensive, unflinching, iron-fisted crackdown and look-back at what this venal Administration has done to this country, to the rule of law, to our constitutional protections, and to countless victims around the world of unspeakably violent treatment at our hands. We pretend we can just move on, learn a few lessons, and act like nothing fundamental needed to be faced head-on and repaired.
And in so failing our moral responsibilities to deal with the ugly rot from which arose an outrage, we ensure it will be repeated; and in our time, each successive failing will come at greater risk to the very survival of the Republic.
The Dark Wraith has thus ranted.
Posted on 08/12/07 at 11:48:36 •
In other words, this is yet another example of a Shrub Administration "heckuva job"........
I don't think we're going to agree on much of these types of things
Rachel, disagreements are always, always welcome here, but supporting facts for such counterpositions are encouraged even more. (Otherwise it's just automatic gainsaying, to borrow from one of my favorite Python sketches). Do read this post by economics prof. Dark Wraith--it explains why all this artificial puffing-up of the economy to bail out (or whatever "aid" verb one wants to use) Wall St. and its billionaires will ultimately come home to roost on all our heads--and not in a good way. Liquidity is tasty in the short term, disastrous over time. As it is, we're in deep debt (and deep shit) with China, no end in sight; that makes America weaker, not stronger. The current situation only aggravates matters.
The genius of those who are pushing this bailout is that they way these markets work, everyone is affected, not just them, so their pleas can be framed as selfless entreaties for the less fortunate. The securitization of these loans means lots of people have a piece of them, and the effect on mortgage credit will hit folks who didn;'t do anything wrong.
I have to laugh, as someone who went to biz school with guys who are now senior Wall Street execs by now: in the 1990's, I used to gape in wonder at the valuations of dotcoms that had done nothing but lose money. And now some of them have tied an anchor around their waist and jumped into the water.
This crash of the sub-prime market was completely predictable, and 1990's hero Alan Greenspan has now completely sabatoged his reputation by praising the "innovations" in the mortgage market a few years ago and giving the Bush tax cuts his blessing.
I think you need to somehow cushion the blow - not for the billionaire hedge fund managers but for the folks caught in this squeeze - will carry the day.
In an interdependent society, the stupidity and avarice of a few can deliver a big whammy to nearly everyone.
This crash of the sub-prime market was completely predictable
It sure was! It only made even semi-sense if the Clinton era's fiscal policies were maintained and, of course, the very FIRST thing ShrubCo. did was shit all over those.
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