Patty Dineen

The view from here

Give us your money, or else. Or else what?

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I have been reading and watching as players on Wall Street and in government are running around with their hair on fire as they try to decide how to address the financial crisis.  What I understand about both the problem, and about the proposed remedy, is probably next to nothing compared to what the financial experts know.  Still, it seems to me that there is more vagueness than necessary.   I thought maybe I was the only one left (and reluctant to display my ignorance) who didn’t have a clear picture of what, exactly, we are trying to avert — “disaster,” “catastrophe,” “collapse,” “quite adverse,” “ruin,” — okay that is scary and I’m scared.  But, uh, what exactly are we talking about?  Does anybody know, and if so why don’t they say so.  So far the descriptions have included things like not being able to get a car loan, a student loan, or a small business loan, a delayed recovery of the housing market, and having a drag on the economy.  “Those things (loans) would be all cut back…” so says Ben Bernanke.  Those things are undesirable, sure, but hardly seem to rise to the “abyss” that we are being warned of.

My suspicion is that there is more at stake, but for some reason, we, the public are not being let in on the real nature of the problem and the potential consequences of not bailing out Wall Street.  Why? Because we would panic?  Because we aren’t seen as able to understand?

I was surprised and reassured to see in a September 23, 2008 New York Times article that there is at least one expert who would also like to know more about exactly what “disaster” we are on the brink of.   Martin Baily, a former chairman of the Council of Economic Advisers in the Clinton Administration and a senior fellow at the Brookings Institution, “remains troubled by the dearth of information combined with the abundance of zeroes in the bailout request. ‘I’d like a clearer statement of what we are afraid was going to happen that requires $700 billion.  Maybe they don’t want to talk about it because it would scare everybody, but it’s a bit much to ask.'”

I agree.

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Written by dineenp

September 24, 2008 at 4:25 pm

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