Why is a bad market always someone's fault? - cougarguard.com — unofficial BYU Cougars / LDS sports, football, basketball forum and message board

UtahDan · 09-26-2008, 08:01 PM

Finance is admittedly not my area of expertise so those of you who know more jump in and help me with this string of questions I have been mulling over this week:

-Is the hue and cry over "the economy" mostly electioneering (if not in this case then in most cases)? Isn't it the case that in capitalism markets MUST sometimes be down and that this is how competition weeds out the weak? Do we expect that government will keep the market from ever being down? If not, why is someone always to blame for it?

-How much does government really effect the economy? If it is a lot, how much does any politician effect the economy? Can a president really be blamed or credited for economic performance of a nation? Isn't this something much much larger than a government or a president?

-As to our current crisis are guys like Warren Buffet right that we are on the edge of a disaster? What would be the consequences of allowing certain companies, no matter how large, old, or venerated, to simply die? Wouldn't the strong survive or would this devastate the larger system in the long run? Shouldn't the government taking over any private business make be nervous? If we do bail out these lenders, is there something illogical about just handing money to the same people who created the problem?

As I say, I don't fully grasp the big picture and am not adverse to having my money spent to save the system, but skeptical spidey senses are just going crazy over all of this. Someone with a good understanding of this help a brother out.

MikeWaters · 09-26-2008, 08:04 PM

a great mist has fallen over the financial system, wherein banks and other financial institutions are afraid to do business, esp. with other financial institutions, because they feel they have absolutely no way to see what is going on (i.e. no transparency, hidden toxic assets).

The role of govt. is to help get rid of the mist, wherein banks know who and what they are dealing with.

landpoke · 09-26-2008, 08:04 PM

Because it can't be our fault so it must be someone else's.

ERCougar · 09-26-2008, 08:16 PM

I think that without a bailout, we could potentially see a massive meltdown of uor financial system (not just market). However, ironically, one of the factors that led to the current crisis is the moral hazard created by the government's handling of the S&L bailout. Besides the enormous cost, I am concerned about the precedent we are reinforcing.

exUte · 09-27-2008, 12:08 AM

Quote:

Originally Posted by UtahDan

Finance is admittedly not my area of expertise so those of you who know more jump in and help me with this string of questions I have been mulling over this week:

-Is the hue and cry over "the economy" mostly electioneering (if not in this case then in most cases)? Isn't it the case that in capitalism markets MUST sometimes be down and that this is how competition weeds out the weak? Do we expect that government will keep the market from ever being down? If not, why is someone always to blame for it?

-How much does government really effect the economy? If it is a lot, how much does any politician effect the economy? Can a president really be blamed or credited for economic performance of a nation? Isn't this something much much larger than a government or a president?

-As to our current crisis are guys like Warren Buffet right that we are on the edge of a disaster? What would be the consequences of allowing certain companies, no matter how large, old, or venerated, to simply die? Wouldn't the strong survive or would this devastate the larger system in the long run? Shouldn't the government taking over any private business make be nervous? If we do bail out these lenders, is there something illogical about just handing money to the same people who created the problem?

As I say, I don't fully grasp the big picture and am not adverse to having my money spent to save the system, but skeptical spidey senses are just going crazy over all of this. Someone with a good understanding of this help a brother out.

winners and losers. If I lose, the other party wins and vice versa. It's not about governing. It's about power and you get that power by how many D's vs. R's there are.

Ever thought of this? How often do you and your spouse agree on a topic? 100%? Most likely not. But become a politician and you tend to agree with another D or R more often than you agree with your spouse.

That's why we need term limits. We have them for president, let's have them for congress.

exUte · 09-27-2008, 12:09 AM

Quote:

Originally Posted by ERCougar

I think that without a bailout, we could potentially see a massive meltdown of uor financial system (not just market). However, ironically, one of the factors that led to the current crisis is the moral hazard created by the government's handling of the S&L bailout. Besides the enormous cost, I am concerned about the precedent we are reinforcing.

No bailout would be worse. Not only for the US but the entire world.

Time to do the lesser of two distinct evils.

09-26-2008, 08:01 PM	#1
UtahDan Senior Member Join Date: Aug 2005 Location: The Bluth Home Posts: 3,877	Why is a bad market always someone's fault? Finance is admittedly not my area of expertise so those of you who know more jump in and help me with this string of questions I have been mulling over this week: -Is the hue and cry over "the economy" mostly electioneering (if not in this case then in most cases)? Isn't it the case that in capitalism markets MUST sometimes be down and that this is how competition weeds out the weak? Do we expect that government will keep the market from ever being down? If not, why is someone always to blame for it? -How much does government really effect the economy? If it is a lot, how much does any politician effect the economy? Can a president really be blamed or credited for economic performance of a nation? Isn't this something much much larger than a government or a president? -As to our current crisis are guys like Warren Buffet right that we are on the edge of a disaster? What would be the consequences of allowing certain companies, no matter how large, old, or venerated, to simply die? Wouldn't the strong survive or would this devastate the larger system in the long run? Shouldn't the government taking over any private business make be nervous? If we do bail out these lenders, is there something illogical about just handing money to the same people who created the problem? As I say, I don't fully grasp the big picture and am not adverse to having my money spent to save the system, but skeptical spidey senses are just going crazy over all of this. Someone with a good understanding of this help a brother out. __________________ The Bible tells us how to go to heaven, not how the heavens go. -Galileo

09-26-2008, 08:04 PM	#3
landpoke Senior Member Join Date: Jul 2007 Location: North Central God's Country Posts: 1,534	Because it can't be our fault so it must be someone else's. __________________ I see a hobo. And when I see the hobo, I think to myself, "This man is poor. His monetary value is low, and my monetary value is high, and it's a shame that he is himself. What can I do?"

09-26-2008, 08:04 PM	#2
MikeWaters Demiurge Join Date: Aug 2005 Posts: 36,365	a great mist has fallen over the financial system, wherein banks and other financial institutions are afraid to do business, esp. with other financial institutions, because they feel they have absolutely no way to see what is going on (i.e. no transparency, hidden toxic assets). The role of govt. is to help get rid of the mist, wherein banks know who and what they are dealing with.

09-26-2008, 08:16 PM	#4
ERCougar Senior Member Join Date: Oct 2007 Posts: 1,589	I think that without a bailout, we could potentially see a massive meltdown of uor financial system (not just market). However, ironically, one of the factors that led to the current crisis is the moral hazard created by the government's handling of the S&L bailout. Besides the enormous cost, I am concerned about the precedent we are reinforcing.