The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities.Allan Greenspan in The New York Times
All this recent huggabaloo about the bailouts of Freddie Mac, Fannie Mae, Lehmann Bros, and now a broader bailout that assumes that the industry is about to collapse.
I have to admit, I believe that the economic problems are a national crisis, and I am not above spreading the damage around. We all benefit if the economy turns around. However, I am concerned about the enormity of it. I worry about the long-term implications. And I'm not the only one. more than a bit miffed about things like CEO salaries, especially when they do things like run companies in the ground and leave in disgrace (well as much as one can with a disgustingly large golden parachute package). I am pissed that those with the funds to invest in companies are reaping ALL the benefits on the backs of the workers who are receiving declining benefits and real wages. This is a lop-sided arrangement that has been perpetuated since the gilded age following the Industrial Revolution and has only been slightly modified (through civil unrest) to be slightly more favorable to American workers.
But I suspect that this bailout is far more reaching. And once again, it is disproportionately going to be shouldered by the American working class. It's a classic case of privatizing profits and socializing risk.
I am a biologist. I know embarrassingly little about economics.
I did hear an interesting idea wherein the banking industry is required to pay into an "insurance policy" against failure. I wonder what people with some understanding of economics think about some of these kinds of ideas. And so, I am opening up the discussion to you. Here is your chance to educate me. Spout off about your concerns. Invite your economist friends. Invite your CEO friends. Invite your political friends. Invite a Republican or two. Spread a little education around.
No fist fights, please.