The Bear Stearns controversy gives rise to another question.
...the fact that this firm was "so big it could not be allowed to fail" starkly reveals the fundamental bias in the current economic and political system toward massiveness and centralization. Note well: such largeness is constantly invoked against those who would commend smaller and more local forms of economy and banking as BETTER because, unlike economies of smaller scale, such large scale (national, international, global) enterprises ensure that no ONE local failure will result in deprivation. That is, in small economies, when a crop fails or a bank folds, the whole community is potentially shattered. A large scale economy theoretically spreads risk so that the consequences of small failures are minimized, much like a punch to a Sumo wrestler is absorbed by his gigantic girth.
The fact that the failure of Bear Stearns was not permitted to occur because it would have potentially caused the collapse of the entire American and even international financial system suggests that this argument on behalf of bigness has always been false and beside the point.
Further, the entire sordid subprime (and increasingly prime) fiasco has shown how this system has been designed to ensure that everyone is able to avoid responsibility - unlike a more local economy, in which responsibility toward one's community, friends, and neighbors is felt with some force. One could easily argue that a Government could just as easily intervene and ensure against the worst effects of a local failure just as it has done in the current instance of defending against the failure of the global system.
We should now put aside the riposte by defenders of economies of massive scale that such an economy defends against failure by spreading risk; if anything, the consequences of our current systemic failure are likely to be far more costly and pervasive, even as we have undermined our moral resources that would otherwise need to accompany this challenging moment.
So happens that "too big to fail" is the over-arching philosophy behind Aurora's hunger for tax increases, folks.
I would sure hope that conservatives look carefully at (a) what got us into this mess in the first place (b) and how our moneyed political system is going to keep us there, at least for the foreseeable future. We cannot fix today’s problems with more of the same.
ReplyDeleteBush started the ball rolling with his tax cuts for the wealthy, draining the U.S. of its surplus and starting the fall of the dominoes. And while this dummy voted for him twice, I think I’m smarter today.
Then the so-called “free market” gurus forced deregulation over sensible regulation, and the money people went wild. Witness the Enron and other collapses.
But now, instead of bailing out the little sub-prime borrowers, the Feds choose to bail out the big sub-prime lenders. Interesting how that works.
I happen to believe that “lending” money to bail out Bear Sterns was probably the right thing to do, so long as it is not ultimately "forgiven." But we have to go further and institute sensible regulations.
But money in politics does strange things, and at some point the free market types must put it all together and realize how much our corrupt political system is costing our country.
I bet you are surprised to hear that view, Dad29.
Actually, Jack, I'm surprised to read your post's horrific errors in fact.
ReplyDelete1) The tax cuts were VERY beneficial to me; you'll have to take my word that I am not "rich"--by a LONG shot. At the same time, I'll grant you that there is a legitimate argument about 'progressive taxation' to be had.
2) Enron was a scam, not created by GWB nor his predecessor. Enron was a bunch of crooks aided by Arthur Anderson (which also was shot in the street and left dead as a result.) How you paste that to GWB is a mystery to me.
3) Buying out 'the debtors' or 'the banks' is exactly the same--two sides of the same coin. Either way, 'the banks' benefit.
4) The overarching issue is "how many USDs are TOO many USDs?" If you like $150/bbl oil, you'll love Fed 'buyouts.'
5) Finally, the "free market" types are perfectly happy to have their asses rescued (or held harmless.) See the 'poor little Bear Stearns people' stories already spread all over the press.
Given the alternatives to GWB, your votes were correct. And if you think that "Too Big to Fail" Bear Stearns is a problem, wait until you get your National HealthCare...
No this is not only Bush’s fault, he’s just the leader the conservatives put in place to implement their wishes. The problem began with Gingrich and the neocons’ 1994 takeover of congress, and it’s been downhill ever since.
ReplyDeleteI benefited from the tax cuts too, but the country suffered. Converting a $300B surplus to a $600B deficit started the ball rolling. But then he got smart and proposed a tax cut for the little people who buy product, and even that was too late. We don’t need tax cuts, we need our jobs back. But the free marketers prefer unregulated globalization, so live with it.
Enron was a scam, yet it demonstrates that even scammers can get appointed to Bush’s inner circle to deregulate the energy market. There are some things that can be done with oil, but the far left and far right have to get out of the way. See http://tinyurl.com/yr2vfd
Certainly we are already paying for a national healthcare system, we just aren’t getting it. 31% of healthcare dollars are being siphoned off to satisfy the for-profit side of the equation, and until we get the money out of politics that’s the way it’s going to be. Healthy Wisconsin, which you hate, would eliminate the 31% waste and use it for patient care instead, but the free marketers won’t have it. So, again, live with it.