In the discussions about what to do to fix up the economic mess left by George Bush, I have come to understand why it happened when I hear the unimagineably ignorant proposals put forth by many Republicans.
In the discussions about what to do to fix up the economic mess left by George Bush, I have come to understand why it happened when I hear the unimagineably ignorant proposals put forth by many Republicans.
I wonder what planet someone could come from who says, for example, “just let the auto companies go into bankruptcy and work themselves out of their financial problems without government assistance.”
Just what will the market for automobiles be doing while American auto companies are in bankruptcy – that‘s right, gaining the market share they left behind, so if they could possibly recover, there would be little auto industry left that the Asian and European firms did not own.
As if that wasn’t enough, now we hear them suggesting that the government should just let the banks fail that are in trouble. Are they crazy?
The viability of the big banks (they are really banking systems because of the variety of services they offer and the outreach of their networks) are central to the capital markets for firms and the credit system for businesses and consumers, and if they fail, the entire economy – including much of the international economy – could come tumbling down. As bad as things are now, the entire American economy is not involved since many banks and other financial institutions are still solvent and operating.
Likewise, we hear, “Just don’t give AIG the money.”
I’ve never heard anything so stupid. If you Google AIG, you can readily see that the scope of its insurance activities covers many of the largest and most well-endowed companies in the world, and if they are not insured, they are opened up to immeasurable risks which, in turn, affects evaluations of their credulity in the market place.
It is a little like the difference between a person having a credit score of 720 or 500. If you are well insured against risks, you are perceived to be in good shape. I agree with Newt Gingrich that we now have a set of institutions that are too big to fail, that they should be broken up, but where was he and his people when the path to monopoly capitalism was paved with the fortunes of their friends?
The lack of creative ideas are substituted with simplistic formulas that would put the country in worse shape than before. Let’s face it, Republicans have not had good ideas for 30 years. I remember when David Stockman, President Reagan’s Director of Office of Management and Budget, described Reaganomics as “Voodoo Economic,” a description that gave Voodoo a bad name.
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