Arguing for the bailout.
Sep. 24th, 2008 06:53 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
randomnessThose who advocate a bailout should meet this minimum standard: they need to make the case that borrowing or taking $2,000 or more for each of us Americans and using it to bail out the various financial institutions is a better use of that money than simply letting those institutions go bust, and sending each of us a check for $2,000 instead. Or even not borrowing or taxing that $2,000 per person in the first place, and just letting the companies go bankrupt.
They can try making the case that the alternative to borrowing or taxing us an extra $2,000 each is a depression. It's almost certainly true that for most people, avoiding a depression is worth more than a $2,000 check. But they need to explain why dire consequences will occur if they don't get the money, not simply wave their hands and tell scare stories. Uncertainty in their explanation is fine. The situation is fluid and no one can be sure about many details. Obfuscation is not.
One might say that it's a very difficult bar I've set, and that Americans simply don't know enough economics to understand the explanation. In that case, I'd say then it's certainly past time educating the American people about economics. They can make that part of their explanation.
I say this as someone who suspects some action may end up being a good idea. But I still haven't heard a conclusive argument for action in general, and no convincing argument for this bailout in particular.
If you want our money, you have to convince us why we should give it to you. It's up to you to convince us.
They can try making the case that the alternative to borrowing or taxing us an extra $2,000 each is a depression. It's almost certainly true that for most people, avoiding a depression is worth more than a $2,000 check. But they need to explain why dire consequences will occur if they don't get the money, not simply wave their hands and tell scare stories. Uncertainty in their explanation is fine. The situation is fluid and no one can be sure about many details. Obfuscation is not.
One might say that it's a very difficult bar I've set, and that Americans simply don't know enough economics to understand the explanation. In that case, I'd say then it's certainly past time educating the American people about economics. They can make that part of their explanation.
I say this as someone who suspects some action may end up being a good idea. But I still haven't heard a conclusive argument for action in general, and no convincing argument for this bailout in particular.
If you want our money, you have to convince us why we should give it to you. It's up to you to convince us.
(no subject)
Date: 2008-09-24 01:37 pm (UTC)Yeah, that would definitely help, along with the varuious ideas for making sure that we at least see some of that money back (as happened in the '30's)
The quick-n-dirty version, as I heard it last night, is imagining the various lenders as the central gear in a system that includes credit & the ability to spend/loan in virtually every other sector of the economy. Without bailout - of some kind - to clear out at least a good portion of the bad debt, the central gear pretty much stops turning. It is already slowing with tightening of credit & willingness to give loans already. Without unclogging the system, kiss economic flow goodbye for at least several years. What does that mean? Basically there will at least be a severe recession and possible depression. So folks say.
Which reputedly is why the markets wet themselves in fear yesterday when it looked like the plan was being held up in Congress.
(Personally I like Schumer's suggestion of "You say you only need $50 Billion now? OK, we can do that & then see what you need afterwards. Not $700B all at once, under the Secretary's control alone"