Reply #35: This is a tough call -- pretty much extortion by the investing class

[DaveT]

again.

"Give us a trillion clams or we'll crash the economy."

It is hard to think of a scenario that is any more galling. But the real question, it seems to me, is how real is this threat of the economy crashing? As with every other shake down operation, pride and your sense of justice make you want to tell the gangsters to go fuck themselves. But pride and justice are not much consolation if they send your spouse and children home to you in a box.

I think the threat of a world wide run on the banks is plausible. And if it happens, there will be a global depression that will last for a decade or more, causing untold grief.



What makes this scenario even more frustrating was the stupid ass deadline that the Congress imposed on itself so that they could all go home to campaign for re-election. Exhibit 176 in the case for a Parliamentary system. Without sufficient time to work out a coherent plan for making credit more available to ordinary borrowers who need money, we saw this Keystone Kops affair this week leading up to a very ill thought-out plan.

On its face, this plan is intended as a stopgap. Whatever.

Next January, we need to have a huge social movement pushing Obama and the new Democratic controlled Congress for re-regulation of the financial system. And we need to have a parallel push for economic reform that returns the USA to a production rather than consumption economy. Tall orders.

But I don't think there is any realistic alternative.

Other opinions?