Zakaria: A Lonely Success - Don't Forget the Bailouts Worked

[Lostlover]

Great article by Fareed Zakaria that discusses how successful the bailout was, yet no politician wants to take credit for it. Stupid Americans hate it but it saved the world economy. Furthermore, the government is going to get the overwhelming majority of the money back.

This is exactly what I hate about politics. Politicians know the bailout worked, but for political reasons they must sell it as a failure. And of course, in a free society people can say what they want. But what happens when the people are completely and happily ignorant?

http://www.newsweek.com/2010/09/19/zakaria-don-t-forget-that-the-bailouts-worked.html

I so couldn't be a politician. I so would be telling the truth. Lying about something you know is wrong to get votes is evil.

So, I'm asking people: Why are Americans so against the bailout? I have a feeling too that if you explained to them what the economy would have been like without the bailout, they'll still stick to their guns.

"There's an old saying that victory has 100 fathers and defeat is an orphan."-JFK

 

[BostonPirate]

History will remember his acheivements and the ugliness of those that foster hate.

I think we are in a new age of McCarthyism, and it is perpetrated by Rush Limbaugh and Murdoch. They are and will be known as the villains of our time.

 

[MoltenRock III]

I'm so happy Rahm Emaunel is hitting the bricks after the election. I think he is one of the worst morons in the WH in advising the WH how to get the message out. Democrats in this 2 years have done a shit ton of great things for America. (Although, I've wished they did even more.) But the dregs of the Senate have stifled so much good legislation that has been needing addressing & passing for 2 decades now.

The bailout did work. It showed that had the govt. and Obama's programs not passed another 8.5 MILLION AMERICANS WOULD BE UNEMPLOYED! Can you imagine how insane the country would be right now if there were another 8.5 million unemployed?

The only reason Average Joe American is against the healthcare bill is because he has no idea what's in it. I'm dead serious. And Democrats once they passed it wanted to just forget about it, because it was so contentious. So no one has taken the time to explain to Average Joe what the bill will do, and what it won't limit or takeaway from him. Why the WH or DNC didn't send out a newsletter via mail to every household in the country I just can't fathom.

The same can be said about the new credit card protection bill, or the financial regulation bill. As well as the stimulus bill, and the raft of other legislation Democrats have passed. These things take time, but Americans by in large are just ignorant, and even willfully ignorant on the legislation. They just want to know when their candy/money machine will again start pumping out cash for their unsustainable lifestyles.

 

[BostonPirate]

So, I'm asking people: Why are Americans so against the bailout?

Because they don't have the intestinal fortitude or values of the previous generations of americans who faced such things and succeeded.

It means they have to not go to starbucks coffee once a week OR cook at home instead of eating out. It means they have to understand that when you wage a war you have to pay for it, and not pretend that the world doesn't affect you personally.

The very same people that are FOR the things that drive the deficit, like war spending and tax cutting are also the ones that refuse to give up a penny out of their personal expense budget to make a difference in a sick, elderly or childs life.

it means we have lost our way as americans.

The bailout worked in that it staved off the looming depression. But to recover as a nation we need to do more, and spending will no longer be the option.

Cutting spending and making hard choices there is one half and the other is taxing and brother I mean BIG taxing.

that is the only way for us to pay for the world we created. we elected a man who waged wars of pre emption without paying for them and now the people that went along with it refuse to accept responsibility.

there is no truth now. reality has become subjective and reliant upon opinion, and that is just not going to get better until americans get back to their values.

 

[BostonPirate]

I'm so happy Rahm Emaunel is hitting the bricks after the election. I think he is one of the worst morons in the WH in advising the WH how to get the message out. Democrats in this 2 years have done a shit ton of great things for America. (Although, I've wished they did even more.) But the dregs of the Senate have stifled so much good legislation that has been needing addressing & passing for 2 decades now.

The bailout did work. It showed that had the govt. and Obama's programs not passed another 8.5 MILLION AMERICANS WOULD BE UNEMPLOYED! Can you imagine how insane the country would be right now if there were another 8.5 million unemployed?

The only reason Average Joe American is against the healthcare bill is because he has no idea what's in it. I'm dead serious. And Democrats once they passed it wanted to just forget about it, because it was so contentious. So no one has taken the time to explain to Average Joe what the bill will do, and what it won't limit or takeaway from him. Why the WH or DNC didn't send out a newsletter via mail to every household in the country I just can't fathom.

The same can be said about the new credit card protection bill, or the financial regulation bill. As well as the stimulus bill, and the raft of other legislation Democrats have passed. These things take time, but Americans by in large are just ignorant, and even willfully ignorant on the legislation. They just want to know when their candy/money machine will again start pumping out cash for their unsustainable lifestyles.

Rahm has been a problem since he got there. He really was a bad choice, but he was also partially responsible for the Obama win and deserved a try at the office he's in.

 

[CowboyBob]

The stimulus and "bailouts" worked. We would have ended up with a deeper recession or a depression with over 20% unemployment and more large businesses would have closed down.

My biggest beef with President Obama is he tried to be too bipartisan with the Republicans, all to no avail. They simply wouldn't give in for their own political reasons. He should have just gone ahead and gone through with his plans, and damn them. He also suffers with communicating. The trouble is the far right is so loud and shrill in their opposition they've masked most everything and refuse to acknowledge Obama's successes.

The Republicans are still demagoguing. It's so ingrained in their blood. Since they don't have any real solutions, that's all they have to run on. Fear.

 

[BostonPirate]

The stimulus and "bailouts" worked. We would have ended up with a deeper recession or a depression with over 20% unemployment and more large businesses would have closed down.

My biggest beef with President Obama is he tried to be too bipartisan with the Republicans, all to no avail. They simply wouldn't give in for their own political reasons. He should have just gone ahead and gone through with his plans, and damn them. He also suffers with communicating. The trouble is the far right is so loud and shrill in their opposition they've masked most everything and refuse to acknowledge Obama's successes.

The Republicans are still demagoguing. It's so ingrained in their blood. Since they don't have any real solutions, that's all they have to run on. Fear.

agreed in that they worked. It is no longer feasable to continue to use the cash to stimulate the economy now, as the effects of the debt the stimulus spending are now dragging the economy into a slower recession.

 

[MoltenRock III]

the problem with that argument, at least from a PR point, is that you can't really prove it. i

my computer mouse protects me against tigers. prove me wrong, I've never experienced a tiger attack while using it.

Anyone dealing in finance worth his/her salt knows damn well that injecting capital into a failing banking system to stabilize it, will improve the situation. After all the Great Depression is a great example of how to never repeat things. Additionally, many of the same things were happening to the banks and the public's actions that were very similar to the 1930s. Watching the M1, M2, bank deposit, and lending was dropping like a stone and accelerating. Renowned economists Alan S. Blinder and Mark Zandi were the authors of the report / study that showed unemployed would have been up by another 8.5 million jobs.

http://www.economy.com/mark-zandi/documents/End-of-Great-Recession.pdf


Asking "to prove" something so ridiculously obvious just because you yourself haven't experience it is ridiculous. Have you ever jumped out of an airplane without a parachute? Will you die? How do you know? Have you ever jumped out of an airplane without a parachute before? If you fall asleep in a suntan booth, and "tan" for 8 hours what will happen? How do you know? Have you tried it before?

 

[BostonPirate]

Exactly.
And who is it that tells us that the bailouts worked? The people who benefited from them!
Who tells us that the stimulus worked? The people who want us to vote for them again!

and who tells us that they didn't?

people that have no clue as to how economics work.

 

[MoltenRock III]

agreed in that they worked. It is no longer feasable to continue to use the cash to stimulate the economy now, as the effects of the debt the stimulus spending are now dragging the economy into a slower recession.

That's absolutely untrue. You should know better than that. There are zero signs pointing to that scenario at all. In fact its the opposite. The T-bill rate and long term interest rates of the bond market have gone done not up.

 

[MoltenRock III]

9.4% of the country is unemployed (and that's not taking into account people who gave up their job search).

what percentage of Walmart shoppers would you estimate knows a damn about finance?

Therein lies the problem. The American electorate by in-large is dumb as balls. And yet many of these same morons act as if they know what they are talking about because they heard a few spiffy, pithy, sound bytes on FOX news.

It's much like the economic deniers that love to continue to blame Barney Frank and Chris Dodd for the entire collapse of the financial system. Or blame poor people for bringing down the finance system. It's laughable. But hey, that's what they heard on FOX news so that's their reality. After seeing 5 minutes of the broadcast, their experts on the collapse, and after all have a GED to prove their intellect.

 

[Lostlover]

I'm so happy Rahm Emaunel is hitting the bricks after the election. I think he is one of the worst morons in the WH in advising the WH how to get the message out. Democrats in this 2 years have done a shit ton of great things for America. (Although, I've wished they did even more.) But the dregs of the Senate have stifled so much good legislation that has been needing addressing & passing for 2 decades now.
.

You too? The media gushes that he's loves to cuss and that he's a Jewish boy from Chicago. I personally can't stand such a smug prick. It was his idea to keep the bailout small because a bigger one wouldn't pass, nevermind he's no economist. He also tried his hardest for Obama to postpone and then to water down health care reform because it didn't seem feasible politically even though democrats controlled the Senate and Congress.

His ass needs to be one of the first ones out.

Oh and on a personal note, Rahm Emmanuel was the only person to speak when I toured the White House earlier this year. But it's hard to say you're here to change Washington and Rahm is your chief of staff.

 

[Lostlover]

Well, for one thing, how do we the public know that (a) without the Wall Street bailouts and auto industry bailout there would have been another Great Depression, and (b) that the option they chose to fix the problem was the only option (as they claimed) rather than just paying off their friends (as usual)?

Okay. With a freeze in credit/loans in an economy, how will businesses grow, make payments and hire workers? FYI, few business transactions are done with cash money. VIPs of businesses are paid about 1/3 of their "salary" in noncash stock options.

A farmer in Iowa that relies on a loan to buy seeds and harvest them can no longer get that loan, who's going to give it to him? If he can't get that loan, how can he justify keeping his workers if they're not working?

So what or who besides the government could step in and fill this gap?

 

[BostonPirate]

That's absolutely untrue. You should know better than that. There are zero signs pointing to that scenario at all. In fact its the opposite. The T-bill rate and long term interest rates of the bond market have gone done not up.

Until the yeild curve between the Bills and bonds gets above 5 percent in the positive I will not be comfortable.

The latest indicators suggest a steep yeild, you are right, BUT the clinton recession recovery didn't really become permanent until it got above the 5 percent mark.

The debt is what is the difference is this time, and IF we borrow more it will drop even lower, threatening the recovery. This is why economists are constantly warning the congress to get hold of the debt and stop borrowing as quickly as possible.

I think you are the only person on this site that actually knows what a bond yeild curve is.

I am impresssed.

edit to add.... the yeild curve is around 4.5 right now I believe, so its tricky.

 

[chuck10x]

Another good article explaining why the bailout was a success yet is unpopular.
http://www.politico.com/news/stories/0910/42135.html

 

[MoltenRock III]

You too? The media gushes that he's loves to cuss and that he's a Jewish boy from Chicago. I personally can't stand such a smug prick. It was his idea to keep the bailout small because a bigger one wouldn't pass, nevermind he's no economist. He also tried his hardest for Obama to postpone and then to water down health care reform because it didn't seem feasible politically even though democrats controlled the Senate and Congress.

His ass needs to be one of the first ones out.

I think Rahm is loved by the media because he was on the news show circuit for the 2 years from '06-'08 almost non-stop. I do think he knows how to get people elected. What I don't think he has a fricking clue on, is how to run the country. The biggest reason Progressives and Liberals aren't "enthused" about voting right now is because they all feel Obama is nothing but a milquetoast, moderate Republican / slight Democrat. The WH compromised away everything before even starting to negotiate! When I was in Singapore or traveling in Asia and pick up a paper I'd be stunned at the nonsense being agreed to before a serious compromise was even in the works.

The stimulus needed to be almost twice as large as it was. Most experts on the economy all said the stimulus needs to be between $1.1 and $1.5 TRILLION. Instead, it was pissed down the toilet to $789 +/- billion, and much of it went to tax cuts that Democrats caved on, in order to get ZERO fucking votes from the wingnuts.

China, for instance, saw its economy stalling, and passed a stimulus bill totaling almost 11% of its GDP, in a matter of days. America's stimulus got pissed away down to only 5% of GDP. Now China is booming again, and the US is growing, but essentially having a jobless recovery. Many of the other Asian nations also stimulated their economies by similar margins to keep the economy from collapsing.

I honestly think you will see a completely different aspect of the President day-to-day with the departure of Rahm. The retarded American media will all lather themselves up, over it was the mid-terms that "focused" the President, but in reality it will be that Rahm was a disaster for Progressives and Liberals. So much could have been accomplished that he 86'd because of having the President's ear. Ugh!

 

[MoltenRock III]

Until the yeild curve between the Bills and bonds gets above 5 percent in the positive I will not be comfortable.

The latest indicators suggest a steep yeild, you are right, BUT the clinton recession recovery didn't really become permanent until it got above the 5 percent mark.

The debt is what is the difference is this time, and IF we borrow more it will drop even lower, threatening the recovery. This is why economists are constantly warning the congress to get hold of the debt and stop borrowing as quickly as possible.

I think you are the only person on this site that actually knows what a bond yeild curve is.

I am impresssed.

edit to add.... the yeild curve is around 4.5 right now I believe, so its tricky.

I do have an MBA, so I am up to snuff on most economic activity and theory.

But really when it comes to debt, no one is concerned about another $500 billion in stimulus or a one or two year deep deficit. What needs to be addressed most is the long-term, structural, debt.

The other thing is not all debt is equal. Debt that finances education, infrastructure, and other long-term investments. Those are no-brainers.

Until the unemployment rate comes down there is simply no way to balance the budget. But what will become an issue sooner rather than later is addressing the long-term undertaxation to spending ratio.

 

[BostonPirate]

well the income taxes are desperately needed. It is the one way to raise tax revenue without making new tax legislation, that's for sure, and it also decreases the outlay on social safety net programs.

I also agree that infrastructure and job spending is the best route, as it creates something tangible that the country benefits from, it increases the tax revenue.

But we both know that new job sectors need to be deveolped, hence the importance of the recently passed small business package. I was TOTALLY in agreement that it was needed a while back. The only reason that the repubs blocked it for as long as they did was to make the economy as bad as possible leading up to the mid terms.

Mixing politics and economics is like dancing on a tightrope over a vat of acid.