John wrote: > You seem to be worried about damage that might have happened if the > government had not intervened without allowing enough time for the > situation to play out and be well understood. I do not deny that it is > possible that there could be some cost from not intervening swiftly. > But my point is that we do not know what that cost is, because it was > never observed, and predictions of economists in these sorts of > situations are unreliable. > > In contrast, we know very well the vast costs of the government > intervention. Many hundreds of billions of dollars spent, trillions of > dollars pledged, and a huge moral hazard that will make such problems > more likely to occur in the future. > > So we have a vast cost, and we have no idea what the benefits were > that were bought with that cost. I, for one, demand more proof that my > money is being used wisely.
I think it's disingenuous to say that we had no idea what would have happened. Many more banks would have failed, and the stock market would have crashed much harder than it did. And we do have a precedent for that kind of hard crash in the great depression. I don't really care if banks or even car companys fail if the damage was limited to those institutions, but the people that are really going to suffer are those that loose their 401K or other retirement savings, or their house, or their job or all of it. As it is there was a huge amount of damage done to these people's future. Had they allowed these institutions to fail, I'm absolutely certain that the economic situation would be far worse. The thing is, I think that at some point it becomes a crisis of confidence more than a purely economic crisis and once you reach that point I think you can count on a prolonged depression. I'm not absolutely sure that we aren't beyond the tipping point now. So while I'm not sure that the initial bailout and the follow up stimulus package were the perfect solutions, I'm pretty confident that had we waited for the Everyone Who Wishes To committee to come back with their well crafted solution, it would have been far too late to be effective. Doug _______________________________________________ http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com
