Bye Bye Banks and Wall Street

Alex · 09-25-2008, 08:25 PM

The fundamental cause of the current problems are not people buying mortgages they can't afford. The problem was systemic and grew out of many factors.

The subprime mortgage issue was just the fuse.

And I understand (and pretty much agree with) the idea that those who gamble should be punished. But it is also a fact that if that punishment is great enough great harm will be done to people who didn't gamble or had no way of knowing that they were gambling.

Much has been made about privatizing the profits and socializing the losses, but it is also true that this is how our system has operated for more than 100 years and in European economies for a lot longer. And I'm not really opposed to that idea when the losses reach a sufficiently broad level. I just don't think that the Paulson plan was the best way to do it and that they're creating a rush to solution that isn't necessarily needed.

But they are also in a screwed if they do and screwed if they don't situation. No matter which way we go, with a bailout or not, the next few years will be tough for a lot of people and so no matter what public opinion will be that the untaken road would have been better.

09-25-2008, 08:25 PM	#11
Alex . Join Date: Feb 2005 Posts: 13,354	The fundamental cause of the current problems are not people buying mortgages they can't afford. The problem was systemic and grew out of many factors. The subprime mortgage issue was just the fuse. And I understand (and pretty much agree with) the idea that those who gamble should be punished. But it is also a fact that if that punishment is great enough great harm will be done to people who didn't gamble or had no way of knowing that they were gambling. Much has been made about privatizing the profits and socializing the losses, but it is also true that this is how our system has operated for more than 100 years and in European economies for a lot longer. And I'm not really opposed to that idea when the losses reach a sufficiently broad level. I just don't think that the Paulson plan was the best way to do it and that they're creating a rush to solution that isn't necessarily needed. But they are also in a screwed if they do and screwed if they don't situation. No matter which way we go, with a bailout or not, the next few years will be tough for a lot of people and so no matter what public opinion will be that the untaken road would have been better.
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