BAILOUT: Yes or No?

[Divinus Arma]

Pretty Simple Poll.

Do we approve the bailout or not? Beyond the poll, why or why not?

EDIT: I understand that alot of you will will want "modified bailout", something not in its current form as urged by many House Republicans. Just vote "Bailout". This isn't a vote for the current bailout, but a vote for "a" Bailout in some form or fashion. Thanks.

[Jolt]

Curiously, the option "Let the Market work" has led us to where we are now. :P

[Lemur]

As it stands I'm against it. If Congress wants to take its time, do it right, and really work on the problem, then I could be persuaded. But we have a history of panicked, rushed legislation under the Bush Admin., and I'm done with it. If prominent Washington jerks are screaming that the sky is falling, I say let it fall unless you can show me you're going to prop it up responsibly.

This seems like a perfect moment to not panic and not rush into things.

I'd like to know some opinions from economic scholars who are not directly involved.

The Economist has a big, long story on the bailout which you can read here.

[Crazed Rabbit]

Jolt -no, it hasn't.

Fannie an Freddie were created (in the 1930s) by the government and privatized, but with extensive privileges, in the 1960s (Or 1970s? Not sure).

They were not free market institutions, but large government intrusions into the market. They were encouraged by the government to encourage bad lending policies and so they encouraged this huge mess of sub-prime loans by buying up just about any crap loans.

Democrats defeated measures in 2005 that would have curtailed those inherently risky activities.

Even now, we see the free market buying up failed firms.

CR

[Jolt]

Jolt -no, it hasn't.

Fannie an Freddie were created (in the 1930s) by the government and privatized, but with extensive privileges, in the 1960s (Or 1970s? Not sure).

They were not free market institutions, but large government intrusions into the market. They were encouraged by the government to encourage bad lending policies and so they encouraged this huge mess of sub-prime loans by buying up just about any crap loans.

Democrats defeated measures in 2005 that would have curtailed those inherently risky activities.

Even now, we see the free market buying up failed firms.

CR

Wait. Two banks singlehandedly created the biggest crisis since the Great Depression? Wow, this is new.

[Xiahou]

Wait. Two banks singlehandedly created the biggest crisis since the Great Depression? Wow, this is new.

Read about what the GSEs are and what they did and you'll begin to get the picture.

[Ironside]

Read about what the GSEs are and what they did and you'll begin to get the picture.

So if I got it right, they've problematic by making a bubble safer earlier on and then by being "too big to fall", they made the investor think that if/when the fecal matter hits the fan the goverment will bail it out.

While I can see that it's enforced the problem, but it also operates on the basic premise that the investors would gladly make a profit by creating a damaging economic situation and risking an economic failure.

You really got low expectations of how an economic system should be run if you consider it the best option to get those people free reins.

As for the bailout, a reluctant yes, if done properly it would keep the economy up, mostly repay itself back and give the investors a nasty burn aswell.

Of course, this is the Bush administration so it's probably the other reason. Short term benefits to keep the econmy up is better than potential long terms, as this debacle is dragging our own economy down atm. Long term downsides is easier to prepare against

In no other advanced country would people work under the same conditions as in the US... why do they do it? Because they believe in the american dream.... Never mind the american dream will never come to you ;)

IMHO the american dream is partly directly responsible.

Isn't one part of that dream to own your own house?

Spoiler Alert, click show to read: 

Of course, compared to the "outsmarting a bubble" syndrome it's small potato.

[Kadagar_AV]

If it was in sweden I would say bail out...

In the US however, I think that in a long term it would be better not to bail out... To show the population that the idea of a free market does not work:)

There is no american dream, the american dream = a way to keep the big masses under the whip while a few people get the cash.

In no other advanced country would people work under the same conditions as in the US... why do they do it? Because they believe in the american dream.... Never mind the american dream will never come to you;)

For everyone who reach the american dream, there are a thousand people having two jobs to get enough cash to go around.

So yeah, in my oppinion... Let the big companies fall.

Start over, build from scratch:)

[Spino]

Curiously, the option "Let the Market work" has led us to where we are now. :P

Not entirely true. Check out Fragony's posts in the relevant thread for some background on past gov't legislation which helped fuel this disaster. The same generation that got the markets into this mess is running the government that is trying to fix the problem. Sort of like the blind leading the blind.

Better no bailout than a bailout using funny money. Tossing over $1 trillion dollars on this fire (I am taking into account the previous bailout bill passed a few months ago) is only going to contribute to the decline of the dollar and force foreign investors to exchange it for more stable currency. We have to show the world we're tough enough to endure and learn from our mistakes. But we all know that ain't gonna happen.

[Jolt]

Not entirely true. Check out Fragony's posts in the relevant thread for some background on past gov't legislation which helped fuel this disaster. The same generation that got the markets into this mess is running the government that is trying to fix the problem. Sort of like the blind leading the blind.

Better no bailout than a bailout using funny money. Tossing over $1 trillion dollars on this fire (I am taking into account the previous bailout bill passed a few months ago) is only going to contribute to the decline of the dollar and force foreign investors to exchange it for more stable currency. We have to show the world we're tough enough to endure and learn from our mistakes. But we all know that ain't gonna happen.

Of course, the American Government is anything but helpful, but the market is the main culprit of this situation. I like Interventionism more and Laissez-Faire less.

[Koga No Goshi]

A strong majority of the public is hopping mad (of every political stripe) and calling their representatives' offices against the bailout. There is no real argument that the American people, at least as a gut reaction, don't want this bailout.

But, we have to remember, I don't know-- and maybe most of you don't know, either- what the full ramifications of doing nothing would be. Myself? I feel that they would probably be bad but I still wish we could just suffer through them if only to teach wanna-be monopolist crybaby capitalists a lesson through all this. But, I do also believe that the people most responsible will not suffer AT ALL, and it will be most of us normal people who suffer, no matter what we do.

I freely admit I have no idea what would happen if we don't bail them out. I just get the vague sort of impression it would be bad, but very little hard facts about what exactly would happen.

[Kralizec]

Poll?

I'm not convinced it's the only way to remedy the situation, all I've got is my rather poor understanding of the situation and the end-of-days preaching by people who have a direct stake in the bailout. I'd like to know some opinions from economic scholars who are not directly involved.

[Divinus Arma]

Email I sent to my congressional representative:


Dear ************,

Regarding the bailout being discussed, I would like to briefly communicate my opinion so that you may better have an understanding of the feelings within your district.

It seems that we are rushing into this without taking the necessary time to ensure that this is done correctly. A market economy must be allowed to feel pain from the poor choices of its players. A bailout may actually serve to increase risk-taking by large companies, since they will not be held accountable for their decisions. Allowing these firms and their executives to parachute to safety while the average American investor, most of whom are investing for retirement, falls to their financial ruin is simply unacceptable.

This bailout seems like a dangerously rushed expansion of government. Crisis is always the friend of the state, and our current economic hiccup is no excuse to consolidate additional power into the hands of the few and the unaccountable.

Thank you for your time and consideration on this very important issue.

Yours Truly,

*******************


Anybody else contact their congressman/woman?

[Strike For The South]

Email I sent to my congressional representative:


Dear ************,

Regarding the bailout being discussed, I would like to briefly communicate my opinion so that you may better have an understanding of the feelings within your district.

It seems that we are rushing into this without taking the necessary time to ensure that this is done correctly. A market economy must be allowed to feel pain from the poor choices of its players. A bailout may actually serve to increase risk-taking by large companies, since they will not be held accountable for their decisions. Allowing these firms and their executives to parachute to safety while the average American investor, most of whom are investing for retirement, falls to their financial ruin is simply unacceptable.

This bailout seems like a dangerously rushed expansion of government. Crisis is always the friend of the state, and our current economic hiccup is no excuse to consolidate additional power into the hands of the few and the unaccountable.

Thank you for your time and consideration on this very important issue.

Yours Truly,

*******************


Anybody else contact their congressman/woman?

Thats very good. Im to angry to articulate something like that now. My letter would consist of profanities and death threats.

[Koga No Goshi]

Good letter, Arma.

[KukriKhan]

Div A was much kinder and more polite than I was in writing to Boxer, Feinstein, and Bilbray.

[Tristuskhan]

Let the Market work. And meet it's fate of headless chicken.

[Hosakawa Tito]

As much as I hate the thought of a serious and long economic depression, and what that may mean to my retirement plans and investments I've accumulated and worked for toward those goals...I hate the thought of giving a taxpayer financed blank check to these robber barons even more. Let them fleece their own company shareholders for that golden parachute, because the Got Rocks will always be first in that line no matter who the rube happens to be. The future generations don't deserve this burden.

That is an excellent letter Div A. Respectful, firm and to the point.