Amusing rendition of the financial crisis, explained in stick-figure dialog. You have to click through the slides via the arrows at the lower left. Poor Norwegian village!
To this point, it's an interesting conversation: the thought (and popular political push) to help foreclosure victims as part of the bailout. Certainly raises the question of exactly what sort of society we wish to run, anyway. And it's fascinating to watch the interplay.
Popularly: "Hey, how come the banks who are in trouble get help, but I don't?" Economically: "Because banks matter, and you don't." Popularly: "Well 'that's capitalism,' they tell me, so why help the banks?" Economically: "Because if the banking system falls, we all fall. But if we prevent the system from failing, only you fall."
At Saturday roller hockey, I overheard a construction worker and a small-biz mortgage broker shout at each other. Eventually they found common ground, agreeing that they're mad as hell at Them and not gonna take it anymore. But they didn't really hear each other, and I don't know what data can be put in front of them to get them to work together.
I think of these sorts of things when someone tells me, "Forget the people who took out mortgages. That's capitalism, baby."
Well it is, and it isn't. Completely unfettered "market" conditions leave a lot of people hurt, while power or wealth accumulates with those who lay on the hurt. Which has always been the cause, throughout this state's history, for creating and revising regulation: To prevent those (people, institutions, whatever) who have access to greater information (through privilege, education, insider access, wealth) from using it to grossly take advantage of those without it.
To the "society we desire" question, presumably we want capitalism to encourage opportunity, innovation and investment to help make life comfortable for all of us. We want regulation to prevent those same gears from making life veeeeery comfortable for the few while screwing many. Inherent in this is recognition that work and sacrifice is still required; that the mythology of American capitalism does not automatically mean a free credit ride for all. But in the politics-for-consumption medium, it is never discussed in these terms. It's always, "Get the government outta my business," vs. "Hey, must be nice that he makes so much more than me."
But philosophically speaking, it's rather evil to have a domestic policy that encourages home ownership (as a means of continuing growth and spending) while creating means and fine print for that home ownership that make the acquisition built on a "house of cards." From the uninformed guy with no credit to the executive suite to the conduct of war, everyone has been encouraged to "risk" and spend without real fear or consequence. Just charge it to the next generation, baby!
I'm not happy that people bought over their head. But I'm no happier that they were encouraged to do so -- and not educated otherwise -- by policy and by (lack of) oversight, all so others could grab short-term gain and our President could keep reassuring us, "The economy is strong and getting stronger."
Just following Krugman alone the last three, four years, the writing of reckoning was on the wall. But while the money is there for the taking ... stay outta the way. Amid Enron and the California energy scam, the red flags about our lack of transparency were there at the highest levels. And by cruel historical coincidence(?), we have this problem festering under an administration that is breathtakingly ill-prepared to deal with it, because it contradicts the upbeat narrative required to enter an insulated circle of yes-men and cronies.
And here we are, in interesting times. Just knew I shouldn't open that fortune cookie.
As you may have noticed, the site has changed. Sampa, the free-site host, did a version 2 of some sort.
Despite an FAQ that made it sound like allowing one's site to go through v.2 surgery would be okay, there were several flexibilities that surprisingly disappeared with the click of a button. (e.g. I cannot believe sidebars like this one are even narrower than before.)
And I'm told -- miraculously! -- that the conversion cannot be undone. Truth be told, I'm actually quite pissed. But free is free. Sampa has otherwise been good to me.
So I need to sort through site "features" to see how I can make do. Except that I don't have the time at the moment, in the middle of graduate classes and Lighthousehockey.com. (btw, I've removed that Lighthouse RSS feed so that you're not clogged with random Islanders hockey gibberish).
But I promise to touch up the accessories when I get a chance, and return to irregularly scheduled blogging.
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dialog. You have to click through the slides via the arrows at the lower left. Poor Norwegian village!
Comments for "'Subprime works'"
February, 2008