Charles asks: CB: What's your position , Marvin ? What do you say should be done ? ============================== Fair question, Charles.
I don't think the banks need a bailout; I think their shareholders should bear the burden. I'm for maximum debt relief and the maintenance of mass purchasing power. It seems to me the banks are still well-capitalized and that there are lots of domestic and foreign investors waiting for the market to bottom out which makes a financial collapse and another Great Depression seem quite unlikely. In the extreme, if it comes to that, nationalization of the industry would become a timely demand, including within influential sectors of the bourgeoisie. The more relevant consideration is what the masses think about the current crisis. No question there is a lot of hostility to the banks. There always is a latent resentment of moneylenders under capitalism which comes bubbling to the surface when there is a credit crisis. The banks are widely held to be responsible for the present mess, and no one really feels inclined to save their bacon. But then people start worrying that the crisis, left unchecked, will deprive them of access to credit and quite possibly of their homes and jobs, so they see their own interests tied to the health of the banking system and are receptive to the Fed's injections of liquidity and any other state measures to restore stability. Unless and until they experience the crisis directly and it is evident the authorities are unable to overcome it, their fears will trump the "Robin Hood approach" every time. People leap into the unknown only when they are desperate and perceive no other alternative. At present, my sense is that many if not most people are still more inclined to see the state assist the banks rather than subprime borrowers. Maybe it is different in the most threatened and distressed minority communities, where the mortgage crisis has been most immediately felt and neighbourhoods are being hollowed out, but elsewhere there appear to be sizeable constitutencies of homeowners who don't want debt forgiveness for others while they are still having to meet their mortgage payments. In Canada, the housing crisis has yet to be felt but everyone has the same anxieties about the impact of the US situation on the global economy.
