On Sat, 04 Oct 2008 16:59:13 -0400, shag <shag at cleandraws.com> wrote:
> what were some other arguments?
Hi Shag, for me there is no question of "support" as the USGov in no-way needs our support for their actions, unless there are some billionaires I am not aware reading this list to inform their campaign contributions.
My question has been: what is the reason people believe that this bailout will do anything other than (temporarily) support financial industry profits? The hostility and cognitive dissonance my simple questions have caused is quite telling. Since you managed to ignore these arguments the first time I made them, you probably will simply do so again, but since you are asking, I'll bite anyway.
My argument is that this is just an opportunistic grab for more corporate welfare, that, actually, there can be no "bailout," because both US financial assets and US housing assets are simply overvalued, recession is therefore inevitable.
Housing, in particular, is not only overvalued because of a flood of cheap money in the form of easy-peasy home mortgages (among things), but also because the housing assets themselves benefit from a government subsidized system of highways and super-sized retailers. These things are not sustainable, and along with fuel-price pressure (which should actually decline a little in the short term), these white-elephant assets will have trouble retaining much value for either their owner-occupier, their own-to-letter, or their repossessor. Further, even if the Government jumps into the role of repossessor of last resort, bailing out profits of lenders, the financial industry will still need to deal with the fact that a major source of growth, the as of recently booming mortgage industry, will massively shrink, and also that the massive leverage required by hedge funds to produce large returns will be significantly downsized. This means that bailout or not, profits, and therefore shareholder value, will fall.
Personally, I believe that as US assets fall in price, direct foreign investment will rise and this will mitigate a US collapse more than any "Bailout," which is, to me, just an extortion. And that foreign central banks will play more of role in replacing interbank lending (while at the same time acquiring US assets) than the US treasury.
Also, I believe that the status of the US as a home of global capital is in irreversible decline, and therefor reduction in consumption, as the world has less need to ship wealth to America, is also inevitable. And more precariously, that geo-strategic encroachment by SCO-allied interests on US clients in Europe, Eurasia, Africa and the Middle-east (and even the Arctic), will continue, as will retrenchment of US influence in Latin America and the Pacific rim, and therefore we will be remain on the brink of war (hopefully not beyond the brink) for the foreseeable future.
In summary, the "Bailout" is not a solution to any of the US's problems, but rather just an opportunistic cash-grab by a financial industry as they cash-out of the US economy and move on.
Now you can proceed to ignore the above and to entertain the peanut gallery with some string of silly non-sequitors designed to show how cool and sexy you are. Wink Wink. Obviously, I wont try to compete on that level. If you have any serious questions or comments, I look forward to them.
-- Dmytri Kleiner editing text files since 1981
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