So .... Depression anyone?

[Andreas the Wise]

Apparently Congress just voted against the 700 billion bailout. The one Bush has been talking up as the only way to solve the economy. As a political scientist student, I say that he's just making it sound more impressive than it is - it won't magically solve the economy. But as an economics student I can grasp how much of the economy (particularly the banking and finance sectors) function largely on trust and confidence, and thus how talking it up as the solution actually makes it the solution.

Unfortunately, it didn't pass. Which means all the work in talking it up goes into reverse in making the situation even worse.


So ... is it going to be like the 30s all over again?

[Prodigy Almighty]

I seriously hope not... >.> The world market is more dependent on America now than it was in the 30s. Who knows how bad it might get? Where it may or may not spread?

[Andreas the Wise]

What worries me is that we know what went wrong in the 30s and we should be able to fix this, but don't seem to be doing so ...

[Jess]

He looked down into her brown eyes,
And said, "Say a prayer for me."
And she threw her arms around him,
Whispered, "God will keep us free."
They could hear the riders coming,
He said, "This is my last fight.
If they take me back to Texas,
They won't take me back alive."

There were Seven Spanish Angels,
At the Altar of the Sun.
They were praying for the lovers,
In the Valley of the Gun.
When the battle stopped and the smoke cleared,
There was thunder from the throne.
And Seven Spanish Angels,
Took another angel home.
She reached down and picked the gun up,
That lay smoking in his hand.
She said, "Father, please forgive me,
I can't make it without my man."
And she knew the gun was empty,
And she knew she couldn't win.
But her final prayer was answered,
When the rifles fired again.

There were Seven Spanish Angels,
At the Altar of the Sun.
They were praying for the lovers,
In the Valley of the Gun.
When the battle stopped and the smoke cleared,
There was thunder from the throne.
And Seven Spanish Angels,
Took another angel home.
SEVEN ANGELS CANYON
There were Seven Spanish Angels,
At the Altar of the Sun.
They were praying for the lovers,
In the Valley of the Gun.
When the battle stopped and the smoke cleared,
There was thunder from the throne.
And Seven Spanish Angels,
Took another angel home.

There were Seven Spanish Angels,
At the Altar of the Sun.
They were praying for the lovers,
In the Valley of the Gun.
When the battle stopped and the smoke cleared,
There was thunder from the throne.
And Seven Spanish Angels,
Took another angel home.

[Andreas the Wise]

Someone's on a spamming spree ....

[Kaiser Loki III]

Things are returning to normal.....

[Jess]

And?

[Kaiser Loki III]

I for one choose not to be depressed!

[Oroigawa Koreyasu]

What worries me is that we know what went wrong in the 30s and we should be able to fix this, but don't seem to be doing so ...

This is not the same as the 30s. The 30s were grossly inflated stocks that everyone suddenly realized weren't worth as much as they were paying, and sold everything, causing the economy to crash.

No, this is something different.

The Bailout was an awful idea. It would have helped in the short term, but would just have stalled the inevitable. I'm not quite sure how bad this will get, but I'm trying to gtfo before I can't...

[Jess]

You realize that if we did bail out the banks, our government would owe more money, which, as a libertarian, I believe that the banks should fail if they are incompetant to run themselves.

[Icebreaker]

WHEN I SAW THE TITLE OF THIS THREAD FROM THE MAIN PAGE, I WAS HOPING ARI HAD POSTED AN EMOTHREAD.

THIS IS LESS ENTERTAINING. ):

[Malliki]

The problem with banks failing are the ordinary working people affected by it, you know, with mortgages, loans and accounts.

[Jess]

Why should the government intervene?

[Malliki]

Because otherwise people and companies will lose their money, or owe money to other institutions or banks than the one they chose in the beginning. Furthermore, banks play a pivotal role in the economic system, and the consequences of failing banks could be far greater than what it costs to bail them out.

[Bayen]

Nonregulation / noninterference is all well and good by itself, but right now, it seems to be a bad idea. We've got banks and corporations waay bigger than they should be, where their collapse could cause far more economic damage than simply one business going down in a sort of domino effect. Sure, the market would sort itself out eventually, but that could take another 10 years of economic depression, which we're trying to avoid.

[Malliki]

Depression is bad, not only because the GDP shrinks, but also because it comes with high unemployment rates.

[Andreas the Wise]

It certainly demonstrates the sheer power of confidence in Finance. The Bill talked up has failed, share market drops ...

And Jess, one problem with not fixing the current banks is that other people might think their commerical bank doesn't have enough money, and then make a run on it (ie withdraw all their money). Banks only store about 3% of deposits in cash - they rely on people not taking it out. And when a commercial bank collapses it isn't the executives who don't eat.

[Chrimigules]

You realize that if we did bail out the banks, our government would owe more money, which, as a libertarian, I believe that the banks should fail if they are incompetant to run themselves.

That's all well and good if we had an ideal situation, where the end of one company simply allows the others to pick up its slack. Unfortunately, with institutions that have become gigantic, it's developed to a point where they are so big they mustn't fail, lest the whole thing come crashing down.

The people at the top don't suffer. That's what the golden parachute is for. It's everyone else who didn't make it out in time, or the innocent bystander who gets swept up in the turmoil that suffers.

So what if the board members lose out on their fifth house and have to wait on buying their third yacht? The people who have lost because other people did bad things for their own benefit end up as the losers.

[Kaiser Loki III]

CASH! How 20th Century...

Elves in the basement of the Treasury go to the hollow tree and electronic credits magically appear.

(Translation -Inflate our way out of it with "imaginary" money.)

Of course there are a few Communists out there.....

[Ari Rahikkala]

A bank run, eh? I don't know if a big enough run would make the FDIC go belly up, but if one happened, well, *that* would be the day.

[Chrimigules]

It would surely be worth watching... behind a barricaded door gripping a gun.

[Kaiser Loki III]

Piffle. The 24 hr. news cycle has great fodder.

To be followed by Bird Flu, Ebola, Global Dimming, Crazed Bolivian Socialists, and Zombies.

[Malliki]

The US needs to invade some backward third world country to get everybody's mind of things. Perhaps Cape Verde? Or Sao Tome? Equatorial Guinea!!! They have oil.

[Harald of Froyalan]

The US needs to invade some backward third world country to get everybody's mind of things. Perhaps Cape Verde? Or Sao Tome? Equatorial Guinea!!! They have oil.

And lots of weapons of mass destruction, of course.

[Malliki]

Didn't stop the US in Iraq!

[Harald of Froyalan]

Of course not because it was their excuse to invade.

[Kaiser Loki III]

Cape Verde? Or Sao Tome? Equatorial Guinea!!!

Not enough to bother. How about Saudi Arabia? The CIA could engineer a coup by "Al-Qeda", and of course we'd HAVE to respond.....

[Jonas]

I don't get it... why are Americans spending more money on guns and the army then helping their own citizens?
If I had to chose, I would prefer to let them use my tax money for recovering the economy a bit and restoring trust on the share markets. What's the advantage of a strong army of your citizens lose all their money and job?

[Kaiser Loki III]

Because the army can be used for all sorts of fun things. And desperate people will join the Army to get a job.

(OMIGOD, I'm having an Ardy moment. Somebody get me a cup of Mango juice, quick!)

[Oroigawa Koreyasu]

I don't get it... why are Americans spending more money on guns and the army then helping their own citizens?
If I had to chose, I would prefer to let them use my tax money for recovering the economy a bit and restoring trust on the share markets. What's the advantage of a strong army of your citizens lose all their money and job?

EXACTLY! WHICH IS WHY AMERICA SUCKS!