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Re: No Time for Utopian Anti-Interventionism
This is worth the listen or read...gets to the heart of the debate here.
http://www.democracynow.org/2008/10/...res_to_vote_on
WILLIAM GREIDER: I think the government needs, right now—I don’t think they’re going to go that way just yet, but I think ultimately they may have to—step up, exercise its full powers in emergency, and literally take control of the banking system and the financial system and supervise it as it deals with the realities of firms that will not survive and those that can survive; husband, if solvent, banks and make sure they stay solvent instead of tipping over; and then use that power to guide economic policy for the country, that is, make sure those financial institutions are lending and keeping the credit spigots open for businesses, for families, for all of the uses that go on in our society; and then add the stimulus alongside it, and I mean major stimulus, to encourage all of those players.
Here’s what happens in a situation like this, at least historically, and I think it’s beginning to happen now. Everybody, quite reasonably, hunkers down. That’s a rational decision: I know we’re in trouble, I know the system is crumbling, I’m going to put my money under the mattress, so to speak, and wait this out. So, that means people stop spending, and they stop borrowing and can’t borrow, and bankers, likewise, stop lending. The government is the only player with the power to step in and reverse that dynamic. That is what the federal government should be doing forcefully right now...
What Paulson is doing is—the bankers got stuck with all these rotten assets, which they created and sold to each other and to the world; now let’s take those off their hands, and they’ll be OK again. I’m not alone in saying that that’s a real crapshoot as to whether that works, first of all, because those banks, as I said, are going to get smaller, and they’re collapsed, and they may or may not start lending again. I would guess not, not until they see a vibrant economy again.
But it’s also—and this is where the public stepped up—it’s profoundly illegitimate as an act of democracy to take the money from taxpayers and say to the villains in this story, “Here, here. Can we help you out of your troubles?” No rules, no guarantees that these villains will correct their behavior, no really serious effort to write into this legislation a sense of where the system goes from here that’s honest.
This is worth the listen or read...gets to the heart of the debate here.
http://www.democracynow.org/2008/10/...res_to_vote_on
WILLIAM GREIDER: I think the government needs, right now—I don’t think they’re going to go that way just yet, but I think ultimately they may have to—step up, exercise its full powers in emergency, and literally take control of the banking system and the financial system and supervise it as it deals with the realities of firms that will not survive and those that can survive; husband, if solvent, banks and make sure they stay solvent instead of tipping over; and then use that power to guide economic policy for the country, that is, make sure those financial institutions are lending and keeping the credit spigots open for businesses, for families, for all of the uses that go on in our society; and then add the stimulus alongside it, and I mean major stimulus, to encourage all of those players.
Here’s what happens in a situation like this, at least historically, and I think it’s beginning to happen now. Everybody, quite reasonably, hunkers down. That’s a rational decision: I know we’re in trouble, I know the system is crumbling, I’m going to put my money under the mattress, so to speak, and wait this out. So, that means people stop spending, and they stop borrowing and can’t borrow, and bankers, likewise, stop lending. The government is the only player with the power to step in and reverse that dynamic. That is what the federal government should be doing forcefully right now...
What Paulson is doing is—the bankers got stuck with all these rotten assets, which they created and sold to each other and to the world; now let’s take those off their hands, and they’ll be OK again. I’m not alone in saying that that’s a real crapshoot as to whether that works, first of all, because those banks, as I said, are going to get smaller, and they’re collapsed, and they may or may not start lending again. I would guess not, not until they see a vibrant economy again.
But it’s also—and this is where the public stepped up—it’s profoundly illegitimate as an act of democracy to take the money from taxpayers and say to the villains in this story, “Here, here. Can we help you out of your troubles?” No rules, no guarantees that these villains will correct their behavior, no really serious effort to write into this legislation a sense of where the system goes from here that’s honest.
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