Do not let the old "how dare you be angry about that and not this?" cool your righteous indignation! (a line most commonly used in my experience by those who care about nothing and want to set up a false choice between their way and a level of activism unsustainable to the average citizen.)
The thing is, I am pretty dang angry about a lot of what's gone down over the last eight years, but I never got active to the point of Congress-writing about any of it, before now. I have no good explanation why, and so I see a fair-enough caricature of myself within the snark...
Eh, I suppose I do have some explanations. There's some fool-me-twice happening here, as well as the fact that the ball's being handled by a Democratic-majority congress, as opposed to an out-of-control president and his cronies.
So someone takes a gamble, and if it works out, everyone wins? That's really not what it feels like.
My core frustration at the bailout comes from the fact that to me, it looks like banks in question made some astoundingly crappy decisions, and now everyone gets to help prop them up rather then let them fail as a consequence. That's what I mean with the privatized/socialized thing.
As dictator555 and others have pointed out, me and my fellow blog-grousers on this topic have only the slightest idea what's actually going on here, and there's no doubt layers of complication and danger I can't see. But that's definitely what the surface looks like.
Paul Krugman's take (more here) seems reasonable: the original Paulson plan was preposterously over-reaching, the Dodd-Frank amendments made it sane but not ideal, but a band-aid was needed to hold the economy together until the regime change in January when "an actually good plan" could be enacted.
My own unbelievably cynical take on the plan as passed is that the equity provisions for the government are so weak as to be nearly meaningless, and there is no commitment to acquire the bank's assets at anything like current market prices. So Paulson's claim that the plan will have the effect of price discovery is absurd: Paulson will pay whatever Paulson thinks is reasonable, and get the commissars oversight committee to accept.
This is a rather confusing issue. I've flip-flopped on it a few times as I've begun to figure out what it's all about and what the consequences of passing (and not passing) this bill are.
Best I've been able to come up with is the 'amputate the gangrenous foot' analogy as to my feelings about this bill. You wish it hadn't gotten to that stage but now that it did you have to take drastic action to keep it from getting worse.
At this point the best we can hope for is: 1) fix the issues that allowed this to get out of hand. 2) punish the primary people responsible (i.e. don't punish the bank -- but punish the people behind the bank decisions)
'2' probably isn't going to happen to enough people though.
My question to all who support this plan: what are you going to say when everything you claimed would happen if the plan wasn't passed comes true anyway?
The number to watch next week is the LIBOR. If it doesn't come down pretty sharply it'll mean the plan has failed.
I'll be delighted if it does come down, but it seems to me improbable that the relatively modest capital injection the plan entails is going to do the job. One of the things you'll find in all the commentaries now that the plan has passed is the prediction "more banks will fail". That risk is why the LIBOR is at or near record highs, and until the risk of bank failure is materially reduced we aren't likely to see much change.
The plan was passed in such a desperate, thoughtless hurry because of the belief that it would promptly unfreeze credit markets. I don't know why people believe that. It will take months before the risk of further bank failures really starts to drop, and the market will want to see some time without any banks failing before it will believe no more banks are going to fail.
So my prediction is that the economy is going to tank anyway, and the effect of this plan is simply to burden future generations of Americans with another few hundred billion or more of debt.
My hope is that Obama has a team working right now on how to deal with the problems he will face as president right now, so when it becomes clear that this plan has not worked he will have something that is better thought out ready to propose.
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resist the sin-snark!
Date: 2008-10-03 11:51 pm (UTC)Re: resist the sin-snark!
Date: 2008-10-04 12:06 am (UTC)Re: resist the sin-snark!
Date: 2008-10-04 12:08 am (UTC)Either way.
no subject
Date: 2008-10-04 12:23 am (UTC)no subject
Date: 2008-10-04 12:31 am (UTC)My core frustration at the bailout comes from the fact that to me, it looks like banks in question made some astoundingly crappy decisions, and now everyone gets to help prop them up rather then let them fail as a consequence. That's what I mean with the privatized/socialized thing.
As
no subject
Date: 2008-10-04 02:32 am (UTC)no subject
Date: 2008-10-04 08:41 pm (UTC)commissarsoversight committee to accept.no subject
Date: 2008-10-04 04:31 am (UTC)Best I've been able to come up with is the 'amputate the gangrenous foot' analogy as to my feelings about this bill. You wish it hadn't gotten to that stage but now that it did you have to take drastic action to keep it from getting worse.
At this point the best we can hope for is:
1) fix the issues that allowed this to get out of hand.
2) punish the primary people responsible (i.e. don't punish the bank -- but punish the people behind the bank decisions)
'2' probably isn't going to happen to enough people though.
no subject
Date: 2008-10-04 08:52 pm (UTC)The number to watch next week is the LIBOR. If it doesn't come down pretty sharply it'll mean the plan has failed.
I'll be delighted if it does come down, but it seems to me improbable that the relatively modest capital injection the plan entails is going to do the job. One of the things you'll find in all the commentaries now that the plan has passed is the prediction "more banks will fail". That risk is why the LIBOR is at or near record highs, and until the risk of bank failure is materially reduced we aren't likely to see much change.
The plan was passed in such a desperate, thoughtless hurry because of the belief that it would promptly unfreeze credit markets. I don't know why people believe that. It will take months before the risk of further bank failures really starts to drop, and the market will want to see some time without any banks failing before it will believe no more banks are going to fail.
So my prediction is that the economy is going to tank anyway, and the effect of this plan is simply to burden future generations of Americans with another few hundred billion or more of debt.
My hope is that Obama has a team working right now on how to deal with the problems he will face as president right now, so when it becomes clear that this plan has not worked he will have something that is better thought out ready to propose.