Do Bailouts disprove Conservative Economic Principles?

[Stravo]

We've all seen that what seems to be the only way to save ourselves from this credit crunch and economic crisis are bailouts. Essentially big government interference, almost nationalization in some instances of banks and other economic institutions. If we had small government with little to no power wouldn't we be facing a veritable disaster? Isn't the fact that the best McCain can come up with that jibes with solid Conservative principles is tax cuts for corporations and capital gains tax cuts yet the one thing that everyone seems to want and that the markets world wide are responding to are the large bailouts/buyouts?

Additionally however you fall on this there is no doubt that part of the responsibility for this mess is the almost zombie like Republican drive to deregulate and trust in market forces. Isn't this crisis (like the Great Depression before it) proof positive that we need big government? That Market forces are not infallible and they need the safety need of regulation and big government intervention and money. Are conservatives red faced over this or am I totally off about these conclusions?

[Big Phil]

We've all seen that what seems to be the only way to save ourselves from this credit crunch and economic crisis are bailouts. Essentially big government interference, almost nationalization in some instances of banks and other economic institutions.

Save ourselves in what way? You mean, not suffer an economic downturn?

If we had small government with little to no power wouldn't we be facing a veritable disaster?

Possibly, but that's what happens to economies.

Isn't the fact that the best McCain can come up with that jibes with solid Conservative principles is tax cuts for corporations and capital gains tax cuts yet the one thing that everyone seems to want and that the markets world wide are responding to are the large bailouts/buyouts?

Are you surprised? Nobody wants the markets to recede and hemorrhage jobs.

Additionally however you fall on this there is no doubt that part of the responsibility for this mess is the almost zombie like Republican drive to deregulate and trust in market forces. Isn't this crisis (like the Great Depression before it) proof positive that we need big government?

Only if you/we/society is unwilling to face the consequences of an unregulated economy.

That Market forces are not infallible and they need the safety need of regulation and big government intervention and money.

Infallible in what regard? Only an imbecile assumed the market would grow perpetually without another recession (ever). What has surprised me is the severity of the economic turmoil and the astonishing incompetence that led us there. That being said, the market downturn we're experiencing is hardly unusual given what has happened.

Are conservatives red faced over this or am I totally off about these conclusions?

The people who are red faced are those who never expected a recession; kind of like those same idiots who expected a perpetual Republican majority in Congress.

Bailouts are a way of lessening the effects of a recession/depression, but that doesn't disprove conservative economic principles, which can be summed up as the less government interference the better, and let the chips fall where they may.

Also, keep in mind that there is a difference between an economic conservative and a social conservative, and just because someone calls themselves a (generic) conservative doesn't mean they believe in conservative economic principles.

[Rye]

We've all seen that what seems to be the only way to save ourselves from this credit crunch and economic crisis are bailouts. Essentially big government interference, almost nationalization in some instances of banks and other economic institutions. If we had small government with little to no power wouldn't we be facing a veritable disaster?

Only in humanitarian scales. The pure market view is staunchly darwinian.

Additionally however you fall on this there is no doubt that part of the responsibility for this mess is the almost zombie like Republican drive to deregulate and trust in market forces. Isn't this crisis (like the Great Depression before it) proof positive that we need big government? That Market forces are not infallible and they need the safety need of regulation and big government intervention and money. Are conservatives red faced over this or am I totally off about these conclusions?

Oh my no, conservatives and lolbertarians don't see this as a problem with their camp at all. Already, they're saying that this was Obama's fault when he sued a bank for not loaning to black people as they were loaning to white people. They think that the reason loans got so fucked was too much incompetence from the government end trying to force the market to do things.

[Patrick Degan]

It is, rather, the creation of conditions which necessitates nationalisation of the banking system which disproves Trickle-Down. Just as it did in 1987. Just as it did in 1929.

[Big Orange]

I am of the opinion that powerful institutions dealing with vast sums of money/resources like governments and corporations are (unavoidably) grindingly incompetent and insidiously corrupt to a certain degree, at least a democratic government has more of a social obligation to a nation and consistantly provides a relatively more reliable service (if properly funded), while a more unaccounted corporation seems to put social obligations further down the list than the Bottom Line. Especially with schools, hospitals, utilities and public transport.

[Wicked Pilot]

We've all seen that what seems to be the only way to save ourselves from this credit crunch and economic crisis are bailouts. Essentially big government interference, almost nationalization in some instances of banks and other economic institutions. If we had small government with little to no power wouldn't we be facing a veritable disaster?

Probably, but I imagine plenty a conservative would be happy with such an outcome. If in the end the foreclosures, stock market crashes, bankruptcies, lost pensions, etc caused us get our collective act together, ie live within our means, respect credit cards, invest with realistic expectations, lend responsibly, take ownership of corporations and their CEOs, and so on, this disaster and all the ass pain associated just maybe will have be worth it. Personally I rather we'd have been doing those things all along without the motivation of economic natural selection, but I can only speak for myself.

[chr335]

No it just means Politicians have to act like they are doing something during an election year. Hell if anything the bailout made it worse as instead of calming the markets down it freaked them out even more.

[Patrick Degan]

No it just means Politicians have to act like they are doing something during an election year. Hell if anything the bailout made it worse as instead of calming the markets down it freaked them out even more.

No, what has kept the markets in a state of panic is not the bailout but rather the continuing perception that the government will not intervene decisively and still try to let Wall St. and the banks handle the grunt work of cleaning up their own mess while simply throwing cash at them to do it.

[chr335]

No it just means Politicians have to act like they are doing something during an election year. Hell if anything the bailout made it worse as instead of calming the markets down it freaked them out even more.

No, what has kept the markets in a state of panic is not the bailout but rather the continuing perception that the government will not intervene decisively and still try to let Wall St. and the banks handle the grunt work of cleaning up their own mess while simply throwing cash at them to do it.

And yet after the bailout passed the markets still when down, but you are right that did have something to do with part of the panic and now no one has any clue who to trust so they trust no one thus increasing the panic

[Patrick Degan]

No it just means Politicians have to act like they are doing something during an election year. Hell if anything the bailout made it worse as instead of calming the markets down it freaked them out even more.

No, what has kept the markets in a state of panic is not the bailout but rather the continuing perception that the government will not intervene decisively and still try to let Wall St. and the banks handle the grunt work of cleaning up their own mess while simply throwing cash at them to do it.

And yet after the bailout passed the markets still when down, but you are right that did have something to do with part of the panic and now no one has any clue who to trust so they trust no one thus increasing the panic

It was a bailout with few strings attached —while Paulson wanted none whatsoever. As it is, though, events are impelling even this buccaneering maladministration, unwillingly but inexorably, toward nationalisation. The panic might have been shut off two weeks ago if that had been the operative condition of the bailout.

[chr335]

It was a bailout with few strings attached —while Paulson wanted none whatsoever. As it is, though, events are impelling even this buccaneering maladministration, unwillingly but inexorably, toward nationalisation. The panic might have been shut off two weeks ago if that had been the operative condition of the bailout.[/quote]

I agree this bailout was a horrible unnecessary idea even if you believe as I do that these companies were force to start making these sub prime mortgages they weren't forced to make them all let them burn for getting stupid with money. The one thing that really pissed me off about this bailout is it increased from 3 pages to OVER 400 when the Senate got done with it. Dam political hacks can't even pass a bill without adding vote securing items

[Darth Wong]

It's not the bailout which disproves conservative economic dogma so much as the gradual trends of the last 30 years. For 30 years, they've been telling us that if you cut taxes on the ultra-rich, they will invest in the economy and we will all benefit. And yet, as it turns out, the middle-class and lower-class are no farther ahead today than they were 30 years ago, despite the vast gains made by the wealthy class during that time. Instead, the middle-class and lower-class were made to believe that they were doing well, by making so much cheap credit available to them so they could sink themselves in debt up to their eyeballs while living a lifestyle that they couldn't really afford. And now this house of cards has come tumbling down, thus forcing the bailout.

Mind you, the severity of the problem would probably be mitigated if the financial institutions were forced to open up their books. Right now, people wait with bated breath for quarterly earnings reports from major banks and other financial institutions because we don't really know how bad it is; until they tell us, we can only make educated guesses. Is it any wonder investors are so jittery? We've just been told that our whole economy hinges on this commercial paper fiasco, and yet we don't even know how bad it really is. All we have are assurances from the same fucktards who told us earlier this year that the problem would be maybe $100 billion at most. Does that make you feel confident?

[Big Orange]

^Hundreds of billions have already been flooded into the failing banks before the bailout was officially drafted and business people's chronic lack of confidence gives the impression of them talking themselves into financial ruin.

In the last thirty years in America and Britain we've had a growing trend of the elite knowing the price for everything but the value of nothing, with the manufacturing and administrative jobs being shifted abroad, while the job market is flooded with cheaper immigrant labour from the Second and Third World countries, all to reduce money imput and make more money for big business. With the middle and working classes increasingly unable to honestly generate wealth for themselves through the shrinking job market, they'd be more susceptible to generous bank loans and selling their overpriced homes.

[Stuart Mackey]

We've all seen that what seems to be the only way to save ourselves from this credit crunch and economic crisis are bailouts. Essentially big government interference, almost nationalization in some instances of banks and other economic institutions. If we had small government with little to no power wouldn't we be facing a veritable disaster? Isn't the fact that the best McCain can come up with that jibes with solid Conservative principles is tax cuts for corporations and capital gains tax cuts yet the one thing that everyone seems to want and that the markets world wide are responding to are the large bailouts/buyouts?

Additionally however you fall on this there is no doubt that part of the responsibility for this mess is the almost zombie like Republican drive to deregulate and trust in market forces. Isn't this crisis (like the Great Depression before it) proof positive that we need big government? That Market forces are not infallible and they need the safety need of regulation and big government intervention and money. Are conservatives red faced over this or am I totally off about these conclusions?

What is "Conservative Economic Principles"? I have always taken that to be living within your means and living on another's credit, to say nothing of advancing credit to those who cannot afford to pay should their circumstances take a change for the worse. This lack of discipline within the West, not just the US, has led to the current economic situation, and are the action's of those who beliefs are quite the opposite of 'conservative'.

[chr335]

We've all seen that what seems to be the only way to save ourselves from this credit crunch and economic crisis are bailouts. Essentially big government interference, almost nationalization in some instances of banks and other economic institutions. If we had small government with little to no power wouldn't we be facing a veritable disaster? Isn't the fact that the best McCain can come up with that jibes with solid Conservative principles is tax cuts for corporations and capital gains tax cuts yet the one thing that everyone seems to want and that the markets world wide are responding to are the large bailouts/buyouts?

Additionally however you fall on this there is no doubt that part of the responsibility for this mess is the almost zombie like Republican drive to deregulate and trust in market forces. Isn't this crisis (like the Great Depression before it) proof positive that we need big government? That Market forces are not infallible and they need the safety need of regulation and big government intervention and money. Are conservatives red faced over this or am I totally off about these conclusions?

What is "Conservative Economic Principles"? I have always taken that to be living within your means and living on another's credit, to say nothing of advancing credit to those who cannot afford to pay should their circumstances take a change for the worse. This lack of discipline within the West, not just the US, has led to the current economic situation, and are the action's of those who beliefs are quite the opposite of 'conservative'.

They are referring to the "Trickle Down Theory" which says that by cutting taxes at the top you encourage economic growth which in turn trickles down to all of the little worker bees down below. http://en.wikipedia.org/wiki/Trickle-down_economics here it a link to the wiki on it

[Stuart Mackey]

We've all seen that what seems to be the only way to save ourselves from this credit crunch and economic crisis are bailouts. Essentially big government interference, almost nationalization in some instances of banks and other economic institutions. If we had small government with little to no power wouldn't we be facing a veritable disaster? Isn't the fact that the best McCain can come up with that jibes with solid Conservative principles is tax cuts for corporations and capital gains tax cuts yet the one thing that everyone seems to want and that the markets world wide are responding to are the large bailouts/buyouts?

Additionally however you fall on this there is no doubt that part of the responsibility for this mess is the almost zombie like Republican drive to deregulate and trust in market forces. Isn't this crisis (like the Great Depression before it) proof positive that we need big government? That Market forces are not infallible and they need the safety need of regulation and big government intervention and money. Are conservatives red faced over this or am I totally off about these conclusions?

What is "Conservative Economic Principles"? I have always taken that to be living within your means and living on another's credit, to say nothing of advancing credit to those who cannot afford to pay should their circumstances take a change for the worse. This lack of discipline within the West, not just the US, has led to the current economic situation, and are the action's of those who beliefs are quite the opposite of 'conservative'.

They are referring to the "Trickle Down Theory" which says that by cutting taxes at the top you encourage economic growth which in turn trickles down to all of the little worker bees down below. http://en.wikipedia.org/wiki/Trickle-down_economics here it a link to the wiki on it

I am well aware of 'trickle down' theory but that's not what I asked.
Oh, don't use wiki as a source, its realy not very credible.

[K. A. Pital]

"Conservative" economic principles - I think Stravo made an error in terminology here. More like "market fundamentalists", and their reaganist principles.

This lack of discipline within the West, not just the US, has led to the current economic situation, and are the action's of those who beliefs are quite the opposite of 'conservative'.

"Discipline"? Maybe, um... oversight? Getting profit at all costs and greed were at play here. I mean, how did those bankers suddenly draw up huge figures of those junk assets, and made huge profits off operating them in the market? Shouldn't the greed of those people be given at least some credit, as opposed to "uh, they simply fucked up without any motive... nah, just bad discipline".

P.S. Also, "within the West"? Too much trust to the US on everything economy has led to the situation. It wasn't Europe's bankers who gave birth to the bullshit "assets" which currently need to be dumped in a sea of government money. It was the US bankers. The same bankers who made the whole world believe this junk paper was worth a lootta money. The world has every right to say the US fucked that up, and it used it's influence to persuade people to follow on into the fuckup by taking shares in risky assets.

[chr335]

They are referring to the "Trickle Down Theory" which says that by cutting taxes at the top you encourage economic growth which in turn trickles down to all of the little worker bees down below. http://en.wikipedia.org/wiki/Trickle-down_economics here it a link to the wiki on it[/quote]

I am well aware of 'trickle down' theory but that's not what I asked.
Oh, don't use wiki as a source, its realy not very credible.[/quote]
I don't use it as a source just as a quick reference for basic background information

[Stuart Mackey]

"Conservative" economic principles - I think Stravo made an error in terminology here. More like "market fundamentalists", and their reaganist principles.

This lack of discipline within the West, not just the US, has led to the current economic situation, and are the action's of those who beliefs are quite the opposite of 'conservative'.

"Discipline"? Maybe, um... oversight? Getting profit at all costs and greed were at play here. I mean, how did those bankers suddenly draw up huge figures of those junk assets, and made huge profits off operating them in the market? Shouldn't the greed of those people be given at least some credit, as opposed to "uh, they simply fucked up without any motive... nah, just bad discipline".

Get enough people around who think that its ok to live on credit and soon enough that is what you get in a nation. So, yes, 'bad discipline', for it is want of discipline that has led to relaxation of those very regulations that prevented certain attitudes from gaining sway, but we have two generations of people in the west who, in the main, have never known true hardship and who think the good times just keep rolling on, they are in power now and look at their works.

P.S. Also, "within the West"? Too much trust to the US on everything economy has led to the situation. It wasn't Europe's bankers who gave birth to the bullshit "assets" which currently need to be dumped in a sea of government money. It was the US bankers. The same bankers who made the whole world believe this junk paper was worth a lootta money. The world has every right to say the US fucked that up, and it used it's influence to persuade people to follow on into the fuckup by taking shares in risky assets.

Yes, "The West" because the west played along, that lack of discipline thing again, the US certainly has influence, but if the US say it is jumping of a cliff today does that mean that Europe should too?

[Big Orange]

Stas Bush, greed is not an exclusive American trait at all, with Neoliberalism having a wide appeal to anybody wanting to make a quick buck (like in the former Soviet Union, with disasterous social results).

[Graeme Dice]

Get enough people around who think that its ok to live on credit and soon enough that is what you get in a nation.

But of course, this is only possible when the banks tare there to lend the money out. And since they are the ones with superior information and since they are the ones with the power in the lender-borrower relationship, the current credit crises falls squarely and entirely on their shoulders. If they lend to somebody who can't afford to pay it back, then that's their problem, not the borrowers'. You have a rather disgusting tendency to blame the victims here.

[Stuart Mackey]

Get enough people around who think that its ok to live on credit and soon enough that is what you get in a nation.

But of course, this is only possible when the banks tare there to lend the money out. And since they are the ones with superior information and since they are the ones with the power in the lender-borrower relationship, the current credit crises falls squarely and entirely on their shoulders. If they lend to somebody who can't afford to pay it back, then that's their problem, not the borrowers'. You have a rather disgusting tendency to blame the victims here.

What victims? You have an entire society living on credit from top to bottom, from bankers to families trying to 'keep up with the Joneses' for crying out loud, and you expect them to blame everyone but themselves and their own self inflicted greed? Someone put a gun to their head or something? Give me a break .
I am by no means wealthy or have a high paying job (quite the opposite actually)yet when I purchased my home I made damn sure that I could afford the payments even if interest rates went up, which they have. I don't have a flash car or a large plasma screen or the greatest computer, I live within my means and I not at risk because I live prudently. Could it be that I am just lucky or simply possessed of enough foresight to realise that an economy can turn sour and have planned accordingly?

[Guardsman Bass]

Get enough people around who think that its ok to live on credit and soon enough that is what you get in a nation.

But of course, this is only possible when the banks tare there to lend the money out. And since they are the ones with superior information and since they are the ones with the power in the lender-borrower relationship, the current credit crises falls squarely and entirely on their shoulders. If they lend to somebody who can't afford to pay it back, then that's their problem, not the borrowers'. You have a rather disgusting tendency to blame the victims here.

What victims? You have an entire society living on credit from top to bottom, from bankers to families trying to 'keep up with the Joneses' for crying out loud, and you expect them to blame everyone but themselves and their own self inflicted greed? Someone put a gun to their head or something? Give me a break .
I am by no means wealthy or have a high paying job (quite the opposite actually)yet when I purchased my home I made damn sure that I could afford the payments even if interest rates went up, which they have. I don't have a flash car or a large plasma screen or the greatest computer, I live within my means and I not at risk because I live prudently. Could it be that I am just lucky or simply possessed of enough foresight to realise that an economy can turn sour and have planned accordingly?

The point is that in the end, it's not supposed to matter whether or not it is the fault of the person who was given a loan they couldn't pay back with the income they had. The bank is the gatekeeper; it's supposed to tell these people "Sorry, you don't have enough collateral, or a good enough credit rating, or income - try again later when you've saved something up".

That's not to say that it is nobody's fault is they can't pay back their mortgage; shit happens. But the point is that when it is known prior to giving out the loan that the recipient probably won't be able to pay this back, the bank realistically should have denied them.

[The Yosemite Bear]

as someone whose livelyhood is dependant on people's generosity, I've been very busy this year with Europeans visiting my tourist mecca home. Americans hardly at all, it seems they either can't afford it, or they can afford it and aren't willing to pay for it. We just had Joel Silver staying in the fancy hotel that I work at not to long ago. He rutinely has to be tracked down and forced to pay for his room charges, or bar bills. Secondarily the whole coustomer Service policy is damaged, since it get's exploited by individuals who realize that by complaining they don't have to pay what they agreed to. (hince how Mr. Silver gets out of paying his bar tab every year he comes up to the park)

[Stuart Mackey]

The point is that in the end, it's not supposed to matter whether or not it is the fault of the person who was given a loan they couldn't pay back with the income they had. The bank is the gatekeeper; it's supposed to tell these people "Sorry, you don't have enough collateral, or a good enough credit rating, or income - try again later when you've saved something up".

That's not to say that it is nobody's fault is they can't pay back their mortgage; shit happens. But the point is that when it is known prior to giving out the loan that the recipient probably won't be able to pay this back, the bank realistically should have denied them.

No, the point is that you have a systemic issue, as I said, from top to bottom. If society as a whole does not act in a prudent manner how can you expect companies to do that when they recruit from a society that does not seem to value being fiscally prudent?