…there is good reason for the public’s skepticism. The experts and policy makers who so desperately want to take action have failed to tell a compelling story about why they’re so afraid.
It’s not enough to say that markets could freeze up, loans could become impossible to get and the economy could slide into its worst downturn since the Great Depression. For now, the crisis has had little effect on most Americans, beyond their 401(k) statements. So to them, the specter of a depression can sound alarmist, and the $700 billion bill that Congress voted down this week can seem like a bailout for rich scoundrels.
Bernanke and his fellow worriers need to connect the dots. They need to use their bully pulpits to teach a little lesson on the economics of a credit crisis how A can lead to B, B to C and C to Depression.
Update: A related article from AP is here.
Here is a good rebuttal to this latest hobgoblin, from a small business owner:
http://www.lewrockwell.com/orig9/fairfax3.html
An excerpt:
“It may be true that without the bailout, Americans will have trouble getting loans for new cars. They will have to save their money and/or buy used cars. Some small businesses may not grow as fast if they depend on savings rather than easy credit created from thin air, but that is precisely the cause of the boom and bust cycle that we are living through right now. America has been on a credit binge for decades, now the mood is shifting towards paying bills and savings. Small businesses must heed the desires of their customers, or they quickly fail.
My so-called representative voted for the Billionaire Bailout. It’s easy to understand why; he’s collected $732,629 from the Securities & Investment industry alone. My firm has paid far more than that in taxes, but taxes don’t buy congressional votes the way campaign contributions do. The 7 Massachusetts ‘representatives’ who voted for the Billionaire Bailout have collectively gathered more than $11,785,000 from investment, banking, real estate, law, lobbying, and building industries. No wonder they support the Billionaire Bailout despite overwhelming public opposition.
Politicians and ‘business leaders’ are forever talking about how they want to help small businesses, but they never propose removing the onerous taxes and burdensome regulations that give large businesses such huge advantages over small business. Instead, proposals like the Billionaire Bailout invariably involve taking more of our money.
Please, don’t help us any more. We can’t afford it.”
Cui bono, folks. Warren Buffett has just bet $5 billion that Goldman Sachs will get a large slice of government largesse. This legislation is a blatant money grab.
Exactly. If the government wishes to make credit easier, let the banks and investment firms fail, and make Fannie/Freddie a true governmental institution that makes bridge loans to small busineses who meet strict guidelines.
That would be much cheaper and would not reward Wall Street’s greed.