Financial Crisis And The Hypocrisy Of Economic Bailout
When I listened to President Bush’s speech the other night, I noticed that my analysis of what caused the Financial Crisis of 2008 was right on target. Too bad President Bush didn’t say anything about greed! Personally, I don’t know if the $700 billion dollars bailout package will fix the problem, but the amount of attention this crisis received made me think about the hypocrisy of our society.
Photo by Anderson Mancini via Flickr
If The World Were A Village Of 100 People…
Before I go on, I would like to quote a small portion of a story originally published by Donella H. Meadows called “Who lives in the Global Village?“, which was later updated in 2005 by David Copeland to reflect a village of 100. It goes something like this:
If we could reduce the world’s population to a village of precisely 100 people, with all existing…the demographics would look something like this:
- 80 would live in substandard housing
- 67 would be unable to read
- 50 would be malnourished and 1 dying of starvation
- 39 would lack access to improved sanitation
- 33 would be without access to a safe water supply
- 24 would not have any electricity (and of the 76 that do have electricity, most would only use it for light at night.)
- 5 would control 32% of the entire world’s wealth; all 5 would be U.S. citizens
If you are interested in a more complete story, you could do a search for “Village of 100 People”.
Quick Bailout For The Financial Crisis, But What About…
It’s amazing how much attention this financial crisis is receiving from Washington DC and how unbelievably fast they are working to fix this problem. But you may wonder why other problems do not get the same kind priority treatment. The answer is simple: people in power are the ones that have the most to lose from this financial crisis.
I wish these other issues get the same kind of attention:
- Unaffordable healthcare and lack of health insurance.
- Substandard education system, especially in inner cities where there’s not enough space and teachers for students.
- Illiteracy. Yes, it still exists in the United States.
- Aging infrastructure.
- Poverty.
- Crime.
- Environmental problems.
- Energy crisis.
Hopefully, the financial crisis will pass and the next President can take care of these issues.
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My favorite hypocrisy about all this has to do with the mantra about “free markets.” President Bush said that the “markets aren’t working properly.” Actually, in a free market scenario they are. Things were overvalued and overleveraged, and while I’m not a huge free market person, it seems obvious that this is a huge correction. So the hypocrisy involved be free market folks who want to pass this bailout is staggering.
But, as you say, those very people who loved the free market when it was leading to insane on-paper profits are the ones in power. And if they let the free market play out now, they are the ones who lose out.
Unfortunately there doesn’t seem to be any real profit in fixing the world’s real problems. Thanks for the 100 village piece. It really drives home the point that here in the 21st century a good part of the world is living sub-standard. These past couple of weeks we’re hearing a lot of dollar figures being thrown around. It makes you wonder what we could really do with that money and the ingenuity of our people.
per your bullet points:
* Agree
* Agree
* Agree
* Agree
* Agree
* Agree
* Agree
* Agree
Overall, I agree some more. Although I still say we need to be as careful in managing our generosity as we are managing our greed. Mixing greed and generosity with perverse incentives eats away at us from above and below.
Good perspective to bring to this. Westerners are still privileged.
What galls me most about the market situation are the crocodile tears over Lehman Bros. and Bear Sterns — anyone recall the grotesque, multi-billion-dollar year-end bonuses they were giving themselves just a few months ago? They saw this coming and they stuffed their pockets.
Using public money to stabilize the system for the public’s sake is perhaps a lesser evil, but there should be consequences for those responsible: both the architects and the watchdogs.
No one in Washington is listening…
One of my oldest friends (over 25 years) is a staunch capitalist and neo-conservative. While he is not a religious fundamentalist (actually he is an atheist), he is certainly an economic fundamentalist. I, on the other hand, definitely lean to the left of center, and my friend places me in the “bleeding heart liberal” camp. Needless to say he and I have disagreed about almost every political and economic issue and event that has occurred in the course of human events. However, on the topic of the economic bailout, he and I are in complete agreement.
JUST SAY NO!!!
He and I are not the exception. As I have been spending time talking with my liberal constituents, I am finding little or no support for this bailout and the right wingers are already in open revolt over this issue. The elected officials of this country should be served notice that unless they are willing to listen to the people they risk eminent ouster from their political positions.
We need to start thinking again and quit behaving like a bunch of amoeba in a Petri dish. The American people are strong enough to withstand the worst of economic and political times. It is time that Washington quits trying to appease their cronies and corporate benefactors and do the job they were elected to perform.
Please call, write or email your representatives immediately. Do not hesitate, because we as a nation and a people are out of time. We need to stop the political and economic incompetency that has brought us to the edge of the abyss. Another 700 billion in the hands of incompetent business and banking is an outrage. Asking the American people to give them this money is criminal.
Healthcare – the government is well known for screwing up the VA. They can’t even manage a tiny percentage of the healthcare industry, let alone all of it.
Education – all education is handled at the local level, not the federal level. All the Feds to is pass unfunded mandates. Despite their involvement, education has deteriorated.
Illiteracy – same points as on education.
Aging infrastructure – the government is already in charge of infrastructure and is letting it deteriorate. Remember the bridge in Minnesota? Been to Atlanta or Memphis lately? They’ve been working on those systems for over 40 years and they look like a bomb went off.
Poverty – the Feds have had a war on poverty for 50 years and we still have it. Remember that you don’t strengthen the weak by weakening the strong.
Crime – on the front page every single day. It gets lots of attention but politicians refuse to do anything substantial about it.
Environmental problems – the government cannot even decide what constitutes an environmental problem.
Energy crisis – all government created. We have enough energy within our borders to satisfy our needs for multiple decades, yet no one is allowed to tap it. We might have a spill? When’s the last time we had a spill in the Gulf, despite the hundreds of rigs and dozens of hurricanes? Please.
All these problems DO get lots of attention. Pick up any newspaper, watch any newscast, read any news website, you’ll see at least one of these categories on it.
The problem isn’t the classic “awareness,” its partisanship. The problem is that when one group has a good idea, the other group kills it so the first group cannot take credit for the good idea.
We have a bunch of politicians that cannot even manage their PERSONAL finances in charge of trillions of dollars and they have taken this country into almost $10 trillion in total federal debt…now, they want more, and they want US to pay for it.
We should replace every single one of them. But this country is made up of a bunch of people who don’t even know the name of the Vice President. They know who won American Idol. They know who was on Oprah last week. They know what song is on top of the charts, but they have no idea about anything that really means something … like economics or finance.
We’re in deep trouble long term, I’m afraid.
Friday night debate was a good one. I am glad that Obama touches on all the points above. However, it appears that everyone in Washington is supporting the $700B package.
You hit the nail right on the head.
The rich have the most to lose and it is clear that they don’t particularly care about how they are going to get themselves off the hook.
Like someone made a statement: Profits have been privatised and losses are socialised.
@Fathersez — That sums it up: “Profits have been privatised and losses are socialised.” If there’s a bailout, I would like to see that it’s a profitable investment rather than a handout.
I like the analogy. I think the bailout was more of restoring confidence in the markets, rather than to save the markets. So I would vote yes for the bailout. Though it is only a small step in the longer term review of our financial industry that got us to this point.
It’s a quite difficult decision for any politician choosing between more bailout packages or letting the free market economic principles take care of the failed businesses, whether it is the financial institutions or automakers. The main focus should be defending the interests of middle-class Americans and creating a stable economic system that will guarantee long-term stability and sustainability. But here we also can face more challenges, since right now the Washington politicians are talking about the second large bailout package. If we bailout financial institutions and other industries again, when are they going to ask for the third bailout package? Or fourth? Maybe this is a time to let free market economy work rather than keep bailing out large, failed corporations? After all, it is the small and medium size businesses that create vast majority of middle-class jobs in America, not the large corporations. Maybe the government is better off to replace banks in lending practices and directly give loan packages with low interest rates to small and medium size businesses? That might work better and have a direct, immediate impact on economy and the middle-class America…