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AND THE ECONOMY GOES SPLAT.
The economic outlook has grown so grim that I don't really know how to address it. You could do worse than reading Krugman, though. And Nourel Roubini, too. "This is the worst US financial crisis since the Great Depression," he says, "and the Fed is treating it as if it was only a liquidity crisis. But this is not just a liquidity crisis; it is rather a credit and insolvency crisis. And it is not the job of the Fed to bail out insolvent non bank financial institutions. If a bail out should occur this is a fiscal policy action that should be decided by Congress after the relevant equity holders have been wiped out and senior management fired without golden parachutes and huge severance packages."
COMMENTS (8)
it's frightening how horrible an effect on the lives of everyone on the globe short-sighted CEOs can have. more than shaking investor confidence, this meltdown ought to be shaking every individual's confidence in the intelligence of our business leaders. they're unelected and often undereducated, and yet they hold the levers to essentially every part of our financial futures.
Posted by: Cody | March 17, 2008 5:19 PM
Wonder how different things might be now if they'd just left Glass-Steagall in place.
Posted by: parsec | March 17, 2008 5:20 PM
I hate to say this, Ezra, but I think you'd better give up on health care reform for the near term (Krugman is hinting that he already has). The next President is going to have his/her hands full with Iraq and the economic collapse. There just won't be any time, money, energy or political capital for anything else. And yes, a quick exit from Iraq would help, but won't be nearly enough, given the magnitude of the economic disaster.
Posted by: beckya57 | March 17, 2008 5:21 PM
So, the federal government can bail out private investors and this is somehow a service to market capitalism, but the federal government can't pay for taxpayers' healthcare because that would be evil socialism?
Oh yeah I get it.
Posted by: chowchowchow | March 17, 2008 6:45 PM
All those Dems who supported the repeal have some 'splainin to do. We could use some tar and feathers to "encourage" them.)
Posted by: Steve LaBonne | March 17, 2008 8:05 PM
Krugman:
Or more aptly, heads I win, tails the taxpayers lose.
It's a clever way of counting your profits and making the whole country bear your losses.
Business executives are professionals at this - profits are entirely because of their hard work and you should give them a huge share, losses are the result of inevitable market forces and they should quickly move on to a new job where they can roll the dice again. (Meanwhile their place is taken by someone new, who if he manages to lose slightly less money, is a savior who deserves huge bonuses for accomplishing the heroic feat known technically as "regression to the mean".)
Posted by: Chris | March 17, 2008 8:16 PM
"they're unelected and often undereducated"
Lots of these guys got the same education as our CEO prezdint - MBAs
Posted by: CParis | March 17, 2008 9:36 PM
Lots of these guys got the same education as our CEO prezdint - MBAs
yeh, precisely. and i've worked with quite a few MBA holders who couldn't do simple algebra. and that's not even touching the subject of having no liberal arts education whatsoever.
Posted by: Cody | March 18, 2008 11:23 AM