Monday, September 29, 2008
Paradox Or Irony?
I've been having a weird reaction to the news that the bailout has been rejected (for now) by the House. Strangely, the more panicked Congress gets, the stronger grows my suspicion that this may not be The Great Depression 2.0. This isn't a rational or thoughtful impression by any means; I'm still trying to figure out why I feel such a thing. But to read about John Boehner "choking up" on the floor of the House in fear that the bailout wouldn't pass activated my radar. It almost seems like they are overplaying this in an attempt to scare us into anything.
Talk radio is not helping this impression, because the quotes from the democratic members of the finance committee from 2004 which Rush played this morning showed how they were utter lackeys of Fannie and Freddie. And a local host read excerpts from the bill which failed today, and, as is most legislation, is frightening in its open-ended inadequacy. Making one man the most powerful in the world who does not have access to nuclear launch codes, for a prolonged period of time, and whose decisions will be law, does not fill me with good feelings. Furthermore, even if the bailout does "make money" for the federal gov't, I won't see a dime. Congress will spend every dime recouped and more, as they always do.
I am still prepared to believe that this bailout is the least bad of the bad options available to us, but for some reason I've begun to doubt that not having the bailout is going to be worse than a temporary credit freeze and the markets working things out by themselves-which of course will bring plenty of pain. But the market should work it out faster than a bailout, and besides the Fed has been dumping hundreds of billions of dollars into the markets anyway. It's not like the government is doing nothing absent a bailout.
In a month, of course, I could well be eating my words, awkwardly typing a post about how I was wrong, the barrel I'm wearing interfering with my arms as I try to type. But, as I say, this is an inchoate feeling, not something I've "reasoned out". The latter would be especially hard for me to do, since I am all but innumerate when it comes to matters of finance greater than checkbook balancing.
Crying on the floor of Congress. For Christ sakes. ¶ 23:00
Talk radio is not helping this impression, because the quotes from the democratic members of the finance committee from 2004 which Rush played this morning showed how they were utter lackeys of Fannie and Freddie. And a local host read excerpts from the bill which failed today, and, as is most legislation, is frightening in its open-ended inadequacy. Making one man the most powerful in the world who does not have access to nuclear launch codes, for a prolonged period of time, and whose decisions will be law, does not fill me with good feelings. Furthermore, even if the bailout does "make money" for the federal gov't, I won't see a dime. Congress will spend every dime recouped and more, as they always do.
I am still prepared to believe that this bailout is the least bad of the bad options available to us, but for some reason I've begun to doubt that not having the bailout is going to be worse than a temporary credit freeze and the markets working things out by themselves-which of course will bring plenty of pain. But the market should work it out faster than a bailout, and besides the Fed has been dumping hundreds of billions of dollars into the markets anyway. It's not like the government is doing nothing absent a bailout.
In a month, of course, I could well be eating my words, awkwardly typing a post about how I was wrong, the barrel I'm wearing interfering with my arms as I try to type. But, as I say, this is an inchoate feeling, not something I've "reasoned out". The latter would be especially hard for me to do, since I am all but innumerate when it comes to matters of finance greater than checkbook balancing.
Crying on the floor of Congress. For Christ sakes. ¶ 23:00
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Yes, despite the WSJ endorsement of the bailout, I was relieved when it was voted down. Better to bring on a smash that lasts a year or two, than to "manage" a bank credit crisis into ten years of stasis, as Japan did. Besides, financial crunches are never as bad as predicted, except if FDR is elected.
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