Macroeconomics au flambé.
Sep. 26th, 2008 03:08 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
chibi_trillianReading commentary on financial articles on MSNBC.com, there's a lot of stupid and selfish floating around regarding this bailout plan. A lot of people think that people who are in foreclosure or going bankrupt obviously did something to deserve it and should get no help. Same for banks. After all, I'M not in foreclosure, so why should I help YOU? People aren't looking at the big picture--that bank collapses hurt the national economy, and that every foreclosed house on your block is a huge bite out of your personal home equity and the local economy.
If we substituted "foreclosure" and "bankrupcy" with "on fire," I think people would understand things a bit better.
Let's say there's currently a bunch of banks in Wall Street on fire. If they stay on fire, a lot of people are going to get hurt, and the fire's going to spread to a bunch of other banks and maybe to the whole city. And if the city catches fire, some other things might catch fire too, since there are so many people running around screaming with their smart business suits on fire. Maybe a bank in your city. Maybe the bank your money's in. Maybe the very dollars in your pocket will burst into flames. Stranger things have happened.
But those are all maybes, and you certainly don't live in New York, so why should you care? Let them burn. Call it urban renewal.
Your neighbor's house might be on fire too. Certainly someone on your block has their house burning down as we speak. Every time a house catches on fire, it scorches all its neighbors and increases the chance that someone else's house--maybe yours--might catch fire. Now, the people living in that house may have done something stupid, like smoking in bed or overloading an electrical outlet. They may also have had a lightning strike or their cat might have knocked over a candle or there was an electrical short in the walls they didn't know about because their appraiser never told them about it.
The fireman has shown up with his hose to put them out, but he needs to pump some water out of your pool to do it because the fire hydrant's broken. You say "Hell no, that's my pool water. I paid for it, I swim in it, and it's mine."
The fireman says "But what if it was your house?"
You say "I'm smart. I'm lucky. I replace the batteries in my smoke detectors twice a year. It'll never happen to me."
The fireman shrugs and says "Okay," and walks away. You watch your neighbor's house burn, and if you're particularly vindictive you toast marshmallows in the flames while calling them idiots.
And then you notice your roof's on fire. Some embers from your neighbor's house floated over there, or maybe lightning struck your house too. It might even have been arson--your neighbors heard you calling them idiots and decided to get revenge. And when you call the fire department, they say that the local fire hydrant is broken and the neighborhood won't allow them access to other sources of water, so they can't come.
So you're stuck throwing buckets of water from your pool and begging your neighbors for help, because jeeeezus, your house is on motherfucking FIRE. Your neighbors look at you and say, "It's not my house on fire. Why should I care?"
If we substituted "foreclosure" and "bankrupcy" with "on fire," I think people would understand things a bit better.
Let's say there's currently a bunch of banks in Wall Street on fire. If they stay on fire, a lot of people are going to get hurt, and the fire's going to spread to a bunch of other banks and maybe to the whole city. And if the city catches fire, some other things might catch fire too, since there are so many people running around screaming with their smart business suits on fire. Maybe a bank in your city. Maybe the bank your money's in. Maybe the very dollars in your pocket will burst into flames. Stranger things have happened.
But those are all maybes, and you certainly don't live in New York, so why should you care? Let them burn. Call it urban renewal.
Your neighbor's house might be on fire too. Certainly someone on your block has their house burning down as we speak. Every time a house catches on fire, it scorches all its neighbors and increases the chance that someone else's house--maybe yours--might catch fire. Now, the people living in that house may have done something stupid, like smoking in bed or overloading an electrical outlet. They may also have had a lightning strike or their cat might have knocked over a candle or there was an electrical short in the walls they didn't know about because their appraiser never told them about it.
The fireman has shown up with his hose to put them out, but he needs to pump some water out of your pool to do it because the fire hydrant's broken. You say "Hell no, that's my pool water. I paid for it, I swim in it, and it's mine."
The fireman says "But what if it was your house?"
You say "I'm smart. I'm lucky. I replace the batteries in my smoke detectors twice a year. It'll never happen to me."
The fireman shrugs and says "Okay," and walks away. You watch your neighbor's house burn, and if you're particularly vindictive you toast marshmallows in the flames while calling them idiots.
And then you notice your roof's on fire. Some embers from your neighbor's house floated over there, or maybe lightning struck your house too. It might even have been arson--your neighbors heard you calling them idiots and decided to get revenge. And when you call the fire department, they say that the local fire hydrant is broken and the neighborhood won't allow them access to other sources of water, so they can't come.
So you're stuck throwing buckets of water from your pool and begging your neighbors for help, because jeeeezus, your house is on motherfucking FIRE. Your neighbors look at you and say, "It's not my house on fire. Why should I care?"
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(no subject)
Date: 2008-09-26 07:36 pm (UTC)She said from across an ocean. Then again, I've heard the economy here in Finland might be heading for a depression as well.
(no subject)
Date: 2008-09-26 07:36 pm (UTC)On this particular topic... well, that's the fundamental difference between conservatives and liberals isn't it. The first philosophy is 'every man for himself' while the latter is 'let's all support each other.'
To me, a successful country provides education, healthcare, and economic support to all it's citizens so they can be productive and happy. Though this is a biased view, I just don't see how the conservative ideal could work. It presupposes that everyone starts off in the same place, is given equal opportunity, and those that aren't doing well aren't trying hard enough.
As someone who's been on welfare because my father was paralyzed and couldn't afford the insurance premiums, I know that people can't just live for themselves and keep their country working. It's just not gonna happen. As you said in your excellent metaphor, when one person suffers we all suffer as a result.
(no subject)
Date: 2008-09-27 04:30 pm (UTC)People just aren't getting that what happens to one of us affects all of us. Our financial system nowadays is a Gordian knot of interconnections and deals with strings going into every sector of the economy. As much as some lawmakers would like to wade in with their mighty regulatory sword and cut it in half so everything is simple and understandable, we can't do that without destroying the whole thing and making all those strings collapse. Making the knot bigger isn't going to help much either. We're going to have to choose what strings to cut and which ones to strengthen, and that's likely to be expensive, ugly, and time-consuming. ):
(no subject)
Date: 2008-09-26 10:06 pm (UTC)I was listening to NPR and the phonelines were open for folks to call in with their comments.
I was incensed and appalled at the incredible malicious and cruelty (and downright ignorant stupidity) of some of these callers. There was one guy who said something along the lines of "Well, it's that bank's fault that they kept loaning to poor people. Obviously, poor people shouldn't have gotten the loans in the first place."
Just...wow. First off, the guy obviously has never read any kind of newspaper, seeing as it was the middle class/upper middle class (you know, the heart blood of this economy??) who are foreclosing and going bankrupt. Then again, maybe he's a multi-millionaire and in his eyes anyone making less than 100K a year is poor.
BUT having said all that, there had better be punishments for those CEO bastards in Fannie Mae, WaMu, AIG who expect to walk away with their multi-million dollar severance checks.