If nothing had been done last October, where would we be right now? No TARP funds, auto bailouts or cramdowns. No foreclosure hiatus. Bankers and financiers were told to pound sand.I think that many more of us would be unemployed right now. I think the S&P would be below 400. I think we'd be witnessing the early signs of civil unrest. So far this has been avoided, but like many of us I think our representatives made a pact with the devil.
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Whichever way it had to go, I'm just glad I'm not one of them. Oh, sure, the perks are good. But there are a lot of people who were really, deeply, sincerely, viscerally going to hate your guts whatever you did. And now they're using Google Earth, Street View, and Live Local to look up your address.
I'm not convinced that government finance is all that different from personal finance. Suppose that I sat down with my family and said, "We spent more money than we took in last year. We're broke. So you know what I've decided? We're going to remodel the house and take a vacation!"
Of course that would not end well, on the personal finance level. I don't think all this government spending will end well either. If the consequences of doing nothing would have been dire, the consequences of reckless spending will be worse.
The feds can always recapatilize the banks.
Private counterparties would have been out of luck, as well as equityholders, but the bank would have remained open for business.
Those pushing hardest for bailouts were execs with a good chunk of their net worth tied up in stock options of their firm.
We're emulating Japan's "lost decade" by propping up firms that should already be in bankruptcy.
did anyone advocate doing nothing?
Freddie Mac's CFO found today dancing at the end of a rope... :-p
Lou, I'm not convinced that TARP and the automaker bailout really did that much good, and I can see where it is about to do a lot of harm. the "Stimulus" Bill has yet to have spent a significant portion of the money, so it's effect is at most psychological at this point. Many of the institutions that took TARP money are in a position to pay the money back and the government won't let them. They instead want sizable equity stakes in the banks. This "soft nationalization" will do grave harm to our banking industry. Many of the banks were strong-armed into taking TARP money when they really didn't need it and are now faced with the possibility of a loss of autonomy and control. The Government has not had a record of making wise banking decisions, and in fact it was bad banking regulations instituted over the last 10-20 years that essentially forced banks to loan money to bad credit risks that led us to this mess to begin with. and the auto bailout did nothing but postpone the inevitable. GM is STILL failing, and we have done nothing but throw a bunch of money down a rathole.
I think that we would be in a far better position if we had allowed the banks and the automakers to fail and enter Chapter 11. We'd be well on the road to recovery now.
Like a band-aid that is stuck to a bunch of hair, sometimes it is better to just give it a swift yank than it is to slowly draw it out. the pain hurts but it is over and done with quickly.
Let’s just think here for a moment...
…Let’s just say that you have a business and you do quite well with it until you made some bad choices. All the while, your parents are watching you do well until you fall on your face and need them to bail you out. If your parents have the money to bail you out, would you take it? Be honest. You don’t know the outcome of your business but you’re will to give it a chance because you don’t want your workers out of work, you don’t want to be out of a business and your parents don’t want to see you fail either because they love you. It may be a while before you get back on your feet to pay your parents back.
My point is this...
…At some time in our lives we need a hand to get out of a jam. So who’s better to do it than our government? We can't see into the future and we don't know what will happen so we can't say that the result of the “stimulus” bill will not be successful. We have to have faith in our government that they are doing the right thing because if they did nothing at all, who really knows what might have happened. It could have gone either way.
I think that a lot of people are out of work because it was good opportunity for some of those businesses to get rid of people they didn’t want working for them in the first place. When they start rehiring again, only a few of them will be called back. It’s all a bunch of hogwash.
I was one that was opposed to the stimulus bill because I wanted all those greedy ass bastards to suffer for their love of money. And it’s only money. The government can spend all they want and that doesn’t mean anything to me. Money is only abstract anyway. And as far as the deficit is concerned, give me a break, if they wanted it to disappear, it will.
We are all tax payers so we do share a part in these decisions whether we have a voice or not. We were put on the earth to help each other and nothing more. When I mean help, I mean everything that comes with it. I love my country and the people I share this earth with. If I had the money, I wouldn’t want to see anyone fail but I would think that they would get their act together the second time around.
To each his own within his reach.
Lou,
You've been suckered. Check out Tom Woods' talk on what happens when government lets the chips fall where they may: "Why You've Never Heard of the Great Depression of 1920"
http://www.youtube.com/watch?v=czcUmnsprQI
The next crash, in 1929, was turned into the great depression by precisely the same policies that Bush and Obama have inflicted on us today.
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