The four of you still bothering to read my blog are probably hoping for some sort of update or description of my new living arrangements, which I have been tempted to do, but could never be bothered. But I can always be bothered for a bit of outrage, so I am writing instead about the $700 billion bailout that somehow miraculously, mercifully failed to be passed yesterday in the House of Representatives.
For more than a year now, I have grumbled about the smaller bailouts -- of banks, of companies, of people who foolishly took out loans they could not afford -- on the principle that you do not reward poor decision-making. All of these entities made very bad decisions, took very big risks and now must face the consequences of these decisions. To give them money or pick them up and dust them off is simply to deprive them of a valuable lesson they would otherwise have learned and to encourage them to continue the very practices that led them into trouble before.
This most recent proposed bailout is staggering in size/cost, it is provocative in its absolute lack of accountability mechanisms (you really think it's a good idea to give one man complete discretion for how to allocate an amount of money nearly equal to the GDP of the Netherlands?), and it is almost ridiculous in its complete opposition to the very liberal economic tenets America is so fond of touting and imposing on others. Further, the fact that the American taxpayer is now being asked to pay for the mistakes of corporations not renowned for their social sensitivity is offensive. These people should pay for their own mistakes, not the American public. (For example, a 'securities transfer tax' similar to the one currently used in Britain and previously used in the US in more financially responsible times would both inject cash into the market -- the primary aim of this bailout -- and would generally spare the average American the burden of providing this liquidity.)
This crisis, if it can be called so, has been building for more than a decade. It did not just happen. What just happened is that people realized the hole they were digging was rather deeper than they had intended and are now being forced to ask for help (or in the case of Lehman, have the dirt thrown on top of them). But this whole situation has been looming, but between public reluctance to question what is perceived as 'easy money' and corporate reluctance to disclose their dealings, the whole matter was left to spiral, and not in a positive direction. We are paying now for our self-imposed ignorance and irresponsibility. But rather than face this and make an attempt at accepting responsibility for a problem that took years to reach its current level, our politicians proposed a plan that absolves people from culpability and which was hastily thrown together and advocated a plan that can only be described as a 'quick fix'.
You don't fix decades of mismanagement with a plan influenced more by politics than economics and slapped together in a matter of days. You are facing a systemic failure, you change the fucking system.
This bailout was proposed as a 'drastic measure' to address what is apparently seen as a drastic situation. What about other 'drastic measures' that will effect long-term benefits socially, environmentally, AND economically? For example, decreasing consumption through rationing, decreasing subsidies, and getting serious about decreasing America's foreign debt by decreasing the amount of cheap foreign goods purchased. Americans are always crying about China and Japan and India, but they never seem to make the connection that they are financing their supposed aggressors. Here's an idea, 'budget shoppers': Start checking the labels on the things you're buying and consider whether it is worth it to you to spend an extra dollar to buy something not made by a foreign competitor. For too long, Americans have simply consumed everything presented to them, demanding increasingly lower prices even for goods with increasingly limited supplies (hello, gasoline!), without bothering to understand how corporations are able to provide them with these cheap goods in an increasingly expensive world.
Many people at this moment are stating that the government must provide a cash infusion to the financial markets in order to prevent a credit crisis, which would cause the economy to shrink. What these people fail to point out or understand, depending on your level of cynicism, is that maybe a smaller economy and less credit is exactly what is needed right now. Maybe, and I know this is a wild idea, maybe it is time for people at all levels -- individual, governmental, corporate -- to re-learn fiscal responsibility and stop expecting easy money, cheap everything, and a consequence-free existence.
For more than a year now, I have grumbled about the smaller bailouts -- of banks, of companies, of people who foolishly took out loans they could not afford -- on the principle that you do not reward poor decision-making. All of these entities made very bad decisions, took very big risks and now must face the consequences of these decisions. To give them money or pick them up and dust them off is simply to deprive them of a valuable lesson they would otherwise have learned and to encourage them to continue the very practices that led them into trouble before.
This most recent proposed bailout is staggering in size/cost, it is provocative in its absolute lack of accountability mechanisms (you really think it's a good idea to give one man complete discretion for how to allocate an amount of money nearly equal to the GDP of the Netherlands?), and it is almost ridiculous in its complete opposition to the very liberal economic tenets America is so fond of touting and imposing on others. Further, the fact that the American taxpayer is now being asked to pay for the mistakes of corporations not renowned for their social sensitivity is offensive. These people should pay for their own mistakes, not the American public. (For example, a 'securities transfer tax' similar to the one currently used in Britain and previously used in the US in more financially responsible times would both inject cash into the market -- the primary aim of this bailout -- and would generally spare the average American the burden of providing this liquidity.)
This crisis, if it can be called so, has been building for more than a decade. It did not just happen. What just happened is that people realized the hole they were digging was rather deeper than they had intended and are now being forced to ask for help (or in the case of Lehman, have the dirt thrown on top of them). But this whole situation has been looming, but between public reluctance to question what is perceived as 'easy money' and corporate reluctance to disclose their dealings, the whole matter was left to spiral, and not in a positive direction. We are paying now for our self-imposed ignorance and irresponsibility. But rather than face this and make an attempt at accepting responsibility for a problem that took years to reach its current level, our politicians proposed a plan that absolves people from culpability and which was hastily thrown together and advocated a plan that can only be described as a 'quick fix'.
You don't fix decades of mismanagement with a plan influenced more by politics than economics and slapped together in a matter of days. You are facing a systemic failure, you change the fucking system.
This bailout was proposed as a 'drastic measure' to address what is apparently seen as a drastic situation. What about other 'drastic measures' that will effect long-term benefits socially, environmentally, AND economically? For example, decreasing consumption through rationing, decreasing subsidies, and getting serious about decreasing America's foreign debt by decreasing the amount of cheap foreign goods purchased. Americans are always crying about China and Japan and India, but they never seem to make the connection that they are financing their supposed aggressors. Here's an idea, 'budget shoppers': Start checking the labels on the things you're buying and consider whether it is worth it to you to spend an extra dollar to buy something not made by a foreign competitor. For too long, Americans have simply consumed everything presented to them, demanding increasingly lower prices even for goods with increasingly limited supplies (hello, gasoline!), without bothering to understand how corporations are able to provide them with these cheap goods in an increasingly expensive world.
Many people at this moment are stating that the government must provide a cash infusion to the financial markets in order to prevent a credit crisis, which would cause the economy to shrink. What these people fail to point out or understand, depending on your level of cynicism, is that maybe a smaller economy and less credit is exactly what is needed right now. Maybe, and I know this is a wild idea, maybe it is time for people at all levels -- individual, governmental, corporate -- to re-learn fiscal responsibility and stop expecting easy money, cheap everything, and a consequence-free existence.
