Here's how you solve the economic crisis

[DRSmith]

what really angers me about the bailout/buyouts aside from socialization of debt, is that we aren't teaching anyone a lesson. we're telling them that it is okay to engage in highly risky behavior that could crash our economy because we'll bail them out if they get unlucky. of course until they get unlucky, they get the benefits of the high-risk practices. how can we possibly expect to prevent this from happening again if we just bail them out when they **** up this badly?

Then you have to enact the laws again also that prevent low income earners from buying houses

Here in Ontario they lowered the amount you needed for down payment but you had to buy insurance and you total income spent on housing how to come with in a certain percentage of your gross income

And those mortgages that were advertised where you paid the interest only would never fly up here

[drums and skins]

All this fuzzy math and logic tickles.

This sounds like a pretty stupid plan to me. It'll cause massive inflation.

Bingo.

what really angers me about the bailout/buyouts aside from socialization of debt, is that we aren't teaching anyone a lesson. we're telling them that it is okay to engage in highly risky behavior that could crash our economy because we'll bail them out if they get unlucky. of course until they get unlucky, they get the benefits of the high-risk practices. how can we possibly expect to prevent this from happening again if we just bail them out when they **** up this badly?

Thats why all the govt. talk is about reform on policies to prevent this from happening again.

[DjTj]

what really angers me about the bailout/buyouts aside from socialization of debt, is that we aren't teaching anyone a lesson. we're telling them that it is okay to engage in highly risky behavior that could crash our economy because we'll bail them out if they get unlucky. of course until they get unlucky, they get the benefits of the high-risk practices. how can we possibly expect to prevent this from happening again if we just bail them out when they **** up this badly?

Who is *they* exactly?

The CEO and CFO of Fannie Mae who were forced out? The AIG CEO that is stepping down (after just replacing the former CEO 3 months ago)? The employees at Bear Stearns, Lehman Brothers, Countrywide, IndyMac, or WaMu who are losing their jobs? The execs at Morgan Stanley and Goldman Sachs that had to subject themselves to commercial bank regulation?

I think there are plenty of people learning lessons in this crisis, and a bailout isn't going to erase that.

The moral hazard argument has some merit, and we can't give everyone a get-out-of-jail-free card, but I don't think we need to punish everyone with the death penalty. If you try to punish everyone who is remotely guilty, you will also punish many innocent people - small businesses that won't be able to get a legitimate loan now because the banks have no capital, people who did everything right with a traditional mortgage but can't sell their houses for a reasonable price, big businesses that won't be able to raise venture capital ...

The worst offenders have already been punished. The issue we face now is how to limit the damage for the rest of us.

[skinfan133]

how about we all just live within our means? Goddamn, it wasn't hard for humanity for over 20,000 years, wtf makes the last three decades so special?