Thomas Kruse wrote:
>One of my ocncerns is the way bailouts are really cover for "lockins" into
>free trade regimes, de-regulation, etc. So, concretely, what would a
>bailout for S. Korea look like that:
>
>- protects the most vulnerable small savers and small businesses
>- lets the big wasters take a fall
As much as I'd love to see the big wasters take a fall, wouldn't that
practice lead to a bigtime 1870s or 1930s deflationary collapse? There are
so many rickety financial structures and practices around the world now
that would implode without public sector guarantees. Of course, these
structures and practices would never have developed had they not been
validated, in Minsky's word, by government indulgence; I doubt the U.S.
stock market would be where it is today were it not for the S&L bailout or
Greenspan's steep yield curve of the early 1990s. But hardly anyone
anywhere on the political spectrum is willing to take the risk of not
validating those threatened financial practices. Anyone here want to risk a
global deflation?
When it goes on a spree, big finance takes lots of hostages.
Doug
