Banks, Bankers, and Loafers Win
Posted by LK on 5/10/10 • Categorized as Blog, Business, Conflict, Featured, Financial Markets, Foreign Affairs, Personal Responsibility, Politics, The Economy and Markets
When the EU and the IMF create a joint trillion dollar bail-out fund, forget about a socialist state, we’re in a global socialist society.
It’s a society that creates strong disincentives for both biting the bullet to get out of the debt pit, and, at the other end of the spectrum, for entrepreneurs who end up keeping less than a buck for every two they collect, and this after going through the necessary but nerve wracking fund-raising, soliciting clients, and making payroll that any start-up endures.
And these bail-out accounts are filled with the emperor’s newly printed copy paper, not even fiat currencies backed by ultra-productive citizens of responsible nations. Don’t even bother to think about gold, silver, or any other hard asset.
Banks (and bankers) and loafers (the type of person, not the shoe) win. It’s going to make for an even more mediocre world than we’re in/headed towards now.
Ordinary and hardworking Joes the world over are getting the short end of the stick on this one, and they’re getting it where the sun don’t shine.
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To think that capitalism will never fail and that world leaders (left or right) won’t take huge measures to prevent the collapse of a world economy (thanks globalization) ignores the VERY short history of industrial capitalism.
And I like capitalism just as much as the next white suburbanite LUCKY enough to have been born into absolute comfort, but I know it’s not a perfect system.
So, here’s my question (asked with all sincerity and hoping someone can answer): What is the alternative moving forward? (NOT: What should we have done differently?)
How do you avoid economic meltdown without a bailout?
It is naive to believe the meltdown would occur in the first place. These outrageously irresponsible actions were only made because it was known the government wouldn’t let them fry at the expense of the voter. We should have protected the victims, and rewarded the banks who did not cause this catastrophe, and let the others die a painful death rather than hedge their suffering on the back of those less fortuitous than them.
So, dudes, the financial sector is a gigantic sector of our economy. It’s been growing at a massive rate since WW2. Check out this neato pie chart (https://www.msu.edu/course/eep/255/industry_sector_gdp.gif) and note just how large of a slice of the pie finance has. That’s pretty much the second biggest slice, right ahead of manufacturing. When you think about how the politicians of the united states tend to look at things in terms of GDP, they’re not willing to let powerful contributors twist in the wind when they can just cut loose support for another sector.