Tuesday, September 23, 2008

700 billion dollar power grab

I don't pretend to understand the crisis in the financial markets. As simply as I can understand it, the "financial products" are smoke and mirrors; there is no equity, there is nothing. I heard someone, perhaps it was John McCain who referred this kind of stuff as a casino economy. That seems realistic.

How this kind of junk leads to this kind of crisis is beyond me. Is our economy really that much a house of cards. The 90s Savings and Loan bailout was due to deregulation that led to bad management decisions. In fact, can anyone show me one of these bailouts that ultimately is about bad management decisions?

yet, some firms seem to gain a position that is so powerful, that they cannot be allowed to fail. So we socialize the risk but privatize the gains. Yup, that is capitalism that few will defend.

What is the effect of such a nationalization of these markets?

The Bush Administration is playing the same kind of crisis game that they did with the patriot Act. At least Congress is not playing this time. But investors, put the pain to the markets today. Is it extortion?

I'm queasy about this bailout. $700 billion would pay a lot of unemployment if that is the alternative.

If we avoid a depression as many calm,rational types, (not like Bush and McCain, hysterical ones those) claim, then isn't government a BIG part of the solution instead of the problem. I mean, this is like a perfect hegelian dialectic. The Conservative/Reagan revolution demonized the government, undermined virtually all public institutions. The market was unfettered. And now, we bailout the financial markets just 28 years later. And BIG government is back.

I've been reading for the past couple of weeks German social theory. Ulrich Beck has a notion of what the post capitalist/post-industrial society is...risk society. The meltdown in the financial markets is a perfect example of it. He was promulgating this theory, beginning in 1985.

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