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Sorry, but even Paul Krugman, as well as every other Nobel Laureate in economics, supported TARP. A collapse to the financial system would've wreaked havoc to t

Sorry, but even Paul Krugman, as well as every other Nobel Laureate in economics, supported TARP. A collapse to the financial system would've wreaked havoc to the economy (ala The Great Depression). "All we have gotten now" is a stablization to the system that didn't collapse, and didn't cause massive bankruptcies and unemployment.

jswinghammer 16y ago
Wait and see. We're not even close to out of the woods yet.
- carmelo5 16y ago
  GDP is up. Dow is back to 12,000. Banks are liquid. Output is as high as it's ever been. Krugman and friends, not to mention the more conservative economists, do not share your views. I really don't understand the populist sentiment.
  - jswinghammer 16y ago
    Most of that is government stimulus which cannot last forever. The banks are definitely not liquid. They are basically insolvent. You can tell this because they don't mark their assets to market.
    - carmelo5 16y ago
      The government stimulus (QEs) can last forever because we have a monopoly on our currency. The Fed can print as much money as it wants. Of course, too much stimulus causes inflation. Banks have the cash, and are lending.
  - cynicalkane 16y ago
    Now I agree with you. The bank bailouts were supported by just about every economist with a brain. They worked, not ideally, but well enough, and better than some expected. But the populist sentiment comes from that the lowest bracket of society is still not out of the recession. The recession is over in the technical meaning, but tell that to the down-and-out and see how they react. It's also not the case that the financial system is totally repaired, though thankfully it looks like the perverse incentives in home mortgages are going away, at least.
    - carmelo5 16y ago
      Well, GDP growth doesn't exist in a vacuum. It's spread throughout every demographic. Every demographic is consuming more than it's ever consumed (highest GDP). Now, I'm assuming you might mean high unemployment as your main complaint. We have more funds now than we've ever had to subsidize unemployment checks without affecting inflation rates. The unemployment checks are going out to many and are in abundant supply. Contrary to what you might hear, the most disadvantaged brackets are being taken care of.
    - ZachPruckowski 16y ago
      >"the lowest bracket of society is still not out of the recession" If by the lowest bracket you mean "the bottom 80%", then yes.
yummyfajitas 16y ago
"If we don't do what I want it will be the Great Depression" is an unfalsifiable claim with little evidence to back it up. The main evidence it has supporting it is the a "post hoc, ergo propter hoc" claim (there was a bank crisis before the great depression). But this ignores a huge number of other factors which also contributed to the GD - massive ecological disaster, huge drops in trade caused by Smoot-Hawley et al, new anti-competitive laws and onerous regulations, new technology making millions of workers obsolete. The claim that a banking crisis caused the GD is popular mainly because banks are easy to model. It's kind of the economic equivalent of looking for your keys near the streetlamp rather than in the dark alley where you lost them.
- carmelo7 16y ago
  The overwhelming cause for the Great Depression was tight monetary policy, and trying to let the market "sort it out" without providing any stimulus (e.g., QEs). When you have a highly illiquid economy with no spending or consumption, you get no growth; that factor prolonged the Depression. That conclusion is supported by economists across the aisle, from Paul Krugman to Milton Friedman, to everyone else in between -- including all living Nobel Laureates in Economics. That premise is the Fed's main justification for the recent QEs.
  - yummyfajitas 16y ago
    The government did not try to let the market sort it out. That is simply revisionist history. Please go read up on the New Deal as well as the Hoover administration (Hoover doubled the budget deficit in an attempt to spur recovery, resulting in FDR calling him a Socialist during the election campaign).
    - carmelo7 16y ago
      That's absolutely untrue and intellectually dishonest. The Feds, as indicated by Friedman and Krugman, were tight with the money supply. Because money wasn't flowing, the economy wasn't running. Please go and read the causes for The Great Depression on any economist's website (or even Wikipedia). http://en.m.wikipedia.org/wiki/Causes_of_the_Great_Depression http://en.m.wikipedia.org/wiki/Causes_of_the_Great_Depressio...
brg 16y ago
Do you even attempt to check your statements, or do you believe an appeal to consensus will simply make people listen to you? Nobel laureate: http://en.wikipedia.org/wiki/Joseph_Stiglitz http://en.wikipedia.org/wiki/Joseph_Stiglitz Dissention: http://www.telegraph.co.uk/finance/recession/5045421/Geithner-rescue-package-robbery-of-the-American-people.html http://www.telegraph.co.uk/finance/recession/5045421/Geithne...

jswinghammer 16y ago

Wait and see. We're not even close to out of the woods yet.

carmelo5 16y ago
GDP is up. Dow is back to 12,000. Banks are liquid. Output is as high as it's ever been. Krugman and friends, not to mention the more conservative economists, do not share your views. I really don't understand the populist sentiment.
- jswinghammer 16y ago
  Most of that is government stimulus which cannot last forever. The banks are definitely not liquid. They are basically insolvent. You can tell this because they don't mark their assets to market.
  - carmelo5 16y ago
    The government stimulus (QEs) can last forever because we have a monopoly on our currency. The Fed can print as much money as it wants. Of course, too much stimulus causes inflation. Banks have the cash, and are lending.
- cynicalkane 16y ago
  Now I agree with you. The bank bailouts were supported by just about every economist with a brain. They worked, not ideally, but well enough, and better than some expected. But the populist sentiment comes from that the lowest bracket of society is still not out of the recession. The recession is over in the technical meaning, but tell that to the down-and-out and see how they react. It's also not the case that the financial system is totally repaired, though thankfully it looks like the perverse incentives in home mortgages are going away, at least.
  - carmelo5 16y ago
    Well, GDP growth doesn't exist in a vacuum. It's spread throughout every demographic. Every demographic is consuming more than it's ever consumed (highest GDP). Now, I'm assuming you might mean high unemployment as your main complaint. We have more funds now than we've ever had to subsidize unemployment checks without affecting inflation rates. The unemployment checks are going out to many and are in abundant supply. Contrary to what you might hear, the most disadvantaged brackets are being taken care of.
  - ZachPruckowski 16y ago
    >"the lowest bracket of society is still not out of the recession" If by the lowest bracket you mean "the bottom 80%", then yes.

yummyfajitas 16y ago

"If we don't do what I want it will be the Great Depression" is an unfalsifiable claim with little evidence to back it up. The main evidence it has supporting it is the a "post hoc, ergo propter hoc" claim (there was a bank crisis before the great depression). But this ignores a huge number of other factors which also contributed to the GD - massive ecological disaster, huge drops in trade caused by Smoot-Hawley et al, new anti-competitive laws and onerous regulations, new technology making millions of workers obsolete. The claim that a banking crisis caused the GD is popular mainly because banks are easy to model. It's kind of the economic equivalent of looking for your keys near the streetlamp rather than in the dark alley where you lost them.

carmelo7 16y ago
The overwhelming cause for the Great Depression was tight monetary policy, and trying to let the market "sort it out" without providing any stimulus (e.g., QEs). When you have a highly illiquid economy with no spending or consumption, you get no growth; that factor prolonged the Depression. That conclusion is supported by economists across the aisle, from Paul Krugman to Milton Friedman, to everyone else in between -- including all living Nobel Laureates in Economics. That premise is the Fed's main justification for the recent QEs.
- yummyfajitas 16y ago
  The government did not try to let the market sort it out. That is simply revisionist history. Please go read up on the New Deal as well as the Hoover administration (Hoover doubled the budget deficit in an attempt to spur recovery, resulting in FDR calling him a Socialist during the election campaign).
  - carmelo7 16y ago
    That's absolutely untrue and intellectually dishonest. The Feds, as indicated by Friedman and Krugman, were tight with the money supply. Because money wasn't flowing, the economy wasn't running. Please go and read the causes for The Great Depression on any economist's website (or even Wikipedia). http://en.m.wikipedia.org/wiki/Causes_of_the_Great_Depression http://en.m.wikipedia.org/wiki/Causes_of_the_Great_Depressio...

brg 16y ago

Do you even attempt to check your statements, or do you believe an appeal to consensus will simply make people listen to you? Nobel laureate: http://en.wikipedia.org/wiki/Joseph_Stiglitz http://en.wikipedia.org/wiki/Joseph_Stiglitz Dissention: http://www.telegraph.co.uk/finance/recession/5045421/Geithner-rescue-package-robbery-of-the-American-people.html http://www.telegraph.co.uk/finance/recession/5045421/Geithne...