Bailout Dodged for Now

The compromised house bill has been defeated 227-206, in a bipartisan fit of doing well by doing nothing.

A few things:

First, despite the doomsday scenarios sketched out regarding the collapse of the credit/financial market, evidence of peril beyond Mass Hysteria is harder to come by- though I dont have it handy at the moment, I recall that McClatchy just managed to rollover a huge amount of debt; that and the fact that aside from investors pulling out of the stock market we don't see the big players acting like its Doomsday/ELE type crisis says to me that extraordinary actions aren't exactly called for, especially with the known downside risk of nationalization and corporatism that have stymied and stagnated economies all over the globe since WWII and the end of the Cold War.

Second, if there is to be bailout, let it be in the time-honored form of the conventional "safety nets" vs. massive intervention in how the economy works. The steel tariffs put more people out of work than were kept at work, meaning that if "we" (re: govt) just paid the affected workers their salaries, "we'd" come out better and with less distortion of the productive economy. Given that we're still seeing lending, albeit at much higher prices, I'm becoming convinced that the way forward here is the same- pick up the collateral damage instead of trying to game the whole system.

Third, via Arnold Kling, if this is a wealth shock at base, then all of this propping up of the financial markets via asset purchases, etc, is just reshuffling the deck chairs. If the economy loses $4-5 trillion in wealth, the economy is poorer and reality is going tor eflect that. The more we distort our indicators of reality, the worse (and longer) the adjustment will take.

Fourth, mea culpa as one of the "excitables" freaking out last weekend- fool me once, shame on you, fool me twice, shame on me. A tepid response is to say "well, I wasn't for what was proposed," but still, the impulse was there so my bad. I (and others excitable as I was) should have more faith in the US financial system, economy, and people that we can absorb and adjust to the shock.

So hopefully, the demise of the bill will allow time to muster a more substantive opposition to the bailout in principle, or at least get a better/less-distortionary policy.

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I want to celebrate

Is it too early to celebrate? Is the bailout well and truly over or are they going to have another go?

Bah, if they don't tax it

Bah, if they don't tax it they'll print it.

I'm a happy little

I'm a happy little Discordian regardless. Didn't they stretch the legislative session beyond the tolerable already anyway ?

Not to Worry

Don't worry, they're still going to get their money. All that legislation bullshit was just a formality.

Using old authority

At least the Fed is acting under authority it already has, vs. congress blessing an increase in executive power.

Is that MacGuyver?

Why is he dressed as a Nazi?

Because he supports gun

Because he supports gun control?

Its Stargate

Thats a screencap from stargate SG-1. So, no fear, not a Nazi.

Idle question

This is for anyone: Suppose the bailout doesn't pass, in any form. What information would you need for you to conclude that you were more likely wrong than right in opposing it, at least in the sense of the economy being worse than it otherwise needed to be? (Setting aside purely moral libertarian concerns.) I.e., if GDP declines 25%, are you still sure that it would have been worse with a bailout? 99%? Is your rejection of the bailout falsifiable?

(I'm not supporting the bailout, by the way. But as someone who is continually, and increasingly, awestruck by the degree of certainty people express in their political beliefs, not to mention their predictions about the future state of the economy, I'm genuinely curious about what results would cause them to re-examine their opinions.)

Post this as a new post

I'll frontpage it.

Done.

Done.

How do you prove anything? [skip this]

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