We are in a CRISIS!! We are going to crash and burn!! What are we to do? But wait..there is hope. There is a light at the end of this dreadful tunnel. Henry Paulsen has put into effect a deal. A deal that will nationalize the banks in the U.S. Are we socialists now!? $250 billion of the $700 billion in the Rescue plan are going to lending money to banks. This plan will unfreeze the market. This deal will also make the government stronger. The government will have preferred stocks in the banks. We didn't even make this plan. Britain did. http://www.nytimes.com/2008/10/09/business/economy/09econ.html?scp=1&sq=nationalizing%20the%20banks&st=cse
http://opinionator.blogs.nytimes.com/2008/10/14/bank-checks/?scp=2&sq=nationalizing%20the%20banks&st=cse
By lending all of this money we are only putting ourselves into a deeper depression. One blogger had this to say, "Misallocation of capital is one of the causes of the current crisis". By lending this money we are only delaying the inevitable. Most conservatives would say that by going through this crisis we will either crash and burn as a society or we will emerge stronger. Are we sacrificing something bigger just so we might have some comfort? Another solution to this would be for the government to "buy the Dow, Nasdaq and S+P through mutual funds." This would in essense supersede the banks who are doing shifty things and get the money directly to the people most affected by this crisis: industrial and technical companies. Because of this crisis companies are forced to sell stocks of their company in a time when foreign industries can come in a sweep these companies off their feet. Then we would be in a deeper crisis. http://open.salon.com/content.php?cid=28738
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I loved when you said “We are going to crash and burn.” It expresses how many people feel in regards to this plan created in order to save the economy. I can’t help but fear that this plan might make life easier for a while, but that our economy will end up in even worse conditions. It completely goes against the principles of a capitalist nation and therefore could consequently cause more damage. This “remedy” might just be worse than the illness. What guarantee do we have that the government ownership over privately owned institutions won’t negatively affect the already horrible economic situation?
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