Bye Bye Banks and Wall Street

[Alex]

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.

[Ghoulish Delight]

Originally Posted by Alex

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.

Agreed. Some action is definitely warranted, but the aim should be to prevent the above, stem the collateral damage to responsible bystanders. They'll be some bleed over, and I'm cool if it's tilted in favor of a few undeserving gamblers.

It's just a little more comforting that they seem to be resisting the political b.s. pressure to get it done NOW NOW NOW at the expense of getting it done intelligently. "Throw billions at it and we don't have to worry about the details."