Americans: Financial lunatics

I am at least glad to know that people more knowledgeable than I are shocked by the efforts to "stimulate" (intended scare quotes) the economy. With my complete lack of financial sophistication I have been wondering if that wouldn't that just create another bubble????? What I want to know now is, how can an ordinary couple, who are trying to live a financially responsible life by living within their means, saving money, paying their bills and educating their children, contribute to financial healing in our country? How can we convince our leaders to behave responsibly? I really want to know.

Re: But if any one of them had set himself up as a whistleblower -- had stood up and said "this business is irresponsible and we are not going to participate in it" -- he would probably have been fired. Not immediately, perhaps. But a few quarters of earnings that lagged behind those of every other Wall Street firm would invite outrage from subordinates, who would flee for other, less responsible firms, and from shareholders, who would call for his resignation.

Note however that Goldmann Sachs steered clear of the subprime mortgage fiasco-- and no one called for its CEO's ouster. That would seem to disprove this theory

What's the hubbub about? Capitalism is self correcting. These cycles happen. They happen in individual businesses, they happen in individual's lives, they happen in nations, they happen in individual markets, such as real estate, or exotic animals, or whatever.

As to rewarding the idiots that could not be bothered to be responsible... What did you expect? You let politicians who claim that they must control our futures and markets get elected. They controlled the money. You let them. You voted for guys who want to give them fantastically MORE money and control. And now, they're going to. They're going to take TRILLIONS of dollars, and give it to the players in the markets, and hand YOU and your children the bill. You wanted it so bad, now you got it. Did you not realize this BEFORE the election?

Rob could not bring himself to vote for the one guy opposing Obama who could have won, because he was so full of partisan angst. That's just how murky the thinking has been from people who set themselves up as "leaders". And then, questions "capitalism" and "free markets" as if leaning on the politicians to regulate us into sinlessness financially is going to do anything but destroy the nation.

We just observed how utterly irresponsible they are. Obama's proposing growing government employment by hundreds of thousands. And all the rest of his promised jobs are make-work producing nothing of value.

And what's happening? People are STILL talking about a "disastrous" war in Iraq. From my point of view, it looks like that's gone pretty darn well. Certainly better than the "economic stimulus" nonsense.

Or TARP.

And what makes you think that "populism" would be anything but a disaster? "Populism" is nothing but another name for "socialism" without the strident rhetoric. It's just shorter term spending plans pandering to the "buy my vote" crowd.

No, it's long past time we did what should have been done. End entitlements, cut government spending by 2/3, refuse to "bail out" anything or anyone. "easing the pain" only results in extending it and deepening it. It's time to stop voting by emotion and start voting cold stark reality and rationality.

Sorry about that. The captcha posted a previous post, rather than the one I had been working on for an hour.

This software really sucks. Bring back the spam.

I just read a lengthy article that I found on "Patrick.net", that echoed what I thought from the start; there WAS no credit crunch at all.

This is debatable. I've not read that particular article, but I do recall some discussion in the econoblogosphere about this a while back. See, e.g.:

economistsview.typepad.com/economistsview/2008/10/there-is-a-cred.html

baselinescenario.com/2008/10/25/federal-reserve-bank-lending-survey/

portfolio.com/views/blogs/odd-numbers/2008/11/04/fed-economists-duel-over-crisis-myths

economistsview.typepad.com/economistsview/2008/11/there-is-too-a.html

The first two mainly link to discussions by others on both sides of the questions.

Robin Thomas -

1. I'm the "Your Name" @ 8:23. Darned captcha....

2. My sole reason for posting above was to clarify that your point regarding the credit crunch (or lack thereof) was debatable. I don't recall mentioning anything regarding the prudence or morality of publicly-funded recapitalizations via TARP.

3. Since you ask, however...although I'm not averse to publicly-funded recapitalization per se, it is not my preference (I have an aversion to most kinds of government spending). Given my druthers, I would've rather seen other measures attempted first. To repeat what I've said elsewhere:

Have some trusted examiners take a hard look at the balance sheets of the major financial institutions & value their assets according to realistic (heck, even pessimistic) assumptions re. housing prices, mortgage defaults (both residential & commercial), economic conditions, etc. Possibly use the resultant haircuts to swap out dodgy assets for safe ones (e.g., Treasuries), ala TARP 1.0. Either recapitalize (the stronger ones) via debt-for-equity swaps, or liquidate (the weaker ones), employing public funds only IOT make depositors whole. I'm not even sure if publicly-funded recapitalization would be necessary under such a regime, but if it were, I'd prefer it be done via loans (*) rather than stock.

4. I suppose I could take offense at your employment of profanity, but you're not saying anything I didn't hear a hundred times over in the Corps. Still, I do wonder what Beliefnet's take on such language is (I've never read the terms of service...).

(*) clusterstock.com/2008/9/hank-paulson-and-ben-bernanke-please-read-this-now

marginalrevolution.com/marginalrevolution/2008/10/net-worth-certi.html