I really wish that I understood what the bailout actually is, and how it's supposed to work.
All I hear is of companies buying corporate jets with the money, lobbying Congress with the money, paying bonuses with the money, and hanging onto (as in: refusing to lend out) the money. I don't hear much about oh, its working, things are beginning to ease up, except occasionally, to a very limited degree. I read that about the first massive chunk of money that was already doled out (to where? Well, apparently thats somewhat of a secret), and I don't hear anything to make me think that this second, much bigger chunk, would be any different -- except of course for those people who say that we ought not to be doing it at all; the system will fix itself once all the weak companies fail. And to hell with the average citizen, presumably.
I trust Barack much more than I did Bush, and more than I would have trusted McCain (certainly, much more than McCain/Palin, the concept of which still gives me the deep willies), and I know that he's only been behind the desk a week, and I know its gonna take quite a while to even begin to work, but still: what exactly is the problem, and how are we proposing to fix it, and how confident are we about the solution? I gather that there are actually multiple solutions, based on multiple interpretations of what the problem actually is. This does not fill me with delight.
So: what? how? In little, non-hyperbolic, non-vitriolic words, please.
6 comments:
I do not think any of this will work for the short or long term. I think it is like a painful disease from which we can recover only in time. Americans always think they can fix things...but many times we can't. More people will suffer. More people will enter dark tunnels from which they won't emerge. The only good thing is more transparency and regulations will be put in place.
You're not making me feel better, T. Its almost like you're saying we can't fix it; we just have to wait it out. I don't want to accept that.
I've heard the talk about transparency. I've yet to see it. Then again, what someone in government thinks of as transparent might to me appear like solid concrete but with a picture of a window painted on it. I tend to beleive that governmental organizations prefer the lack of transparency rather than the presence.
The big topic in the House of Parliament (the one in Canada eh) was the powerful protectionist rhetoric coming from the Obama announcement this morning. Like, anything made in the US with the bail out money must be made from steel made in the US. There were other, similar comments.
Fine, I suppose. You can do that, its your country, you can do what you like. (and I kinda like the steel idea...local raw materials "should" be used, even if you heavily subsidise the industry. Of course,ownership of the steel corporations may or may not be important when what IS important is who gets the jobs. The same thing with lumber... but thats much more complicated, involving US owned corporations operating in Canada. Like I said, MUCH more complicated. But I digress...)
The question they were asking in the house of commons was "We are preparing our own stimulus package. Should we be stating in that package that any stimulus money must not be used to buy products made in the US?".
The one country in the world which buys most of the stuff the US makes is Canada. Even if we sell more stuff than we buy...grin. (Whose fault is that?http://www.census.gov/foreign-trade/balance/c1220.html) Does anybody REALLY think it is a good idea to have the door into that market slammed shut? Cause thats what's a-gonna happen unless the liberal democrats down south of us cool's the speechifying rhetoric down a notch.
Adam Smith, in his seminal book "The Wealth of Nations" offers a full chapter, 20% of his book, to pointing out the reality of this statement. Here I quote....
cut and paste follows from Chapter three....
That the Division of Labour is limited by the Extent of the Market
AS it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he has occasion for.
If I might paraphrase this a bit...if Mr. Obama brings in protectionist legislation, Canada and other nations will respond with countervailing duties which will limit the market for US goods, thereby putting people out of work. More trade means more jobs....
(Does nobody but ME see this!!!!!!!!?????????)
Ahhh, I feel much better now that I got that rant off my chest! Have a nice day now...grin!
I don't support the general concept of protectionism, but a lot of people here -- including me -- feel that we got screwed by the concept as implemented, and, for a while at least, are likely to prefer it strongly over 'free trade'.
Well, there has not been "free trade" for a long time now.
If it ever existed anywhere other than on paper.
Me...I welcome the end of "free trade"...it never succeeded in reducing the paperwork burden (the true drag on industry). Limiting trade will accelerate the inevitable term of deflation which will set both our countries onto a more even, if lower in the water, keel. Already the border towns are screaming loudly about the lack of visitors (and their money) due to much more stringent passport regulations. The auto plants in Dayton and Detroit are laying off workers because, well, they can't sell their cars.
Well, we'll see how it shakes out.
I begin to understand how people can be fascinated with the idea of central planning. "Not a lot", they'd likely say. "Just a little. As needed."
Uh-HUH.
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