Michael Moore's Take on USA 700 billion bailout

[eastcoast_gsx]

Whether the bailout is a good thing or a bad thing in the long run, it is hard for me to stomach that governments are bailing out failing companies. They are getting rewarded for failure. It's just not right.

Most people would have assumed bonuses were a part of doing well... not a given even when your company is ready for the toilet. What a sham.

Imagine a bonus for doing ******.... not for doing "relatively well".... then you have morons like Thains saying that the bonuses are needed to keep good people... yeah, like the people that sunk the ship...

http://ca.youtube.com/watch?v=SDuj0iuXXKc

[zeekat]

You steal someone's wallet or purse, you get probation.

You steal someone's car, you go to jail.

You steal $50 billion from private investors, you get house arrest in your $7 million dollar home.

You steal $700 billion dollars from taxpayers, you get huge bonuses.

AND NO WONDER WHY OUR SOCIETY IS FRACKED!!

[Angus Argyle]

http://www.truthout.org/020509S

" More than half of the 300 companies helped by the federal government's Troubled Asset Relief Program (TARP) have dished out $114.2 million for politicking, with $77 million spent on lobbying last year and $37 million spent on federal campaign contributions for the 2008 election. "

"Those political activities have, in part, yielded the companies $305.2 billion from TARP, or a massive return of 267,208 percent."

[inreb]

Although I disagree with Marko's original post that we shouldn't listen to MM because he doesn't have a degree, I have to also disagree strongly with your post.

I don't want to speculate on your educational background, but if you've been to University, I hope you don't really think you could have done better on your own. Being in an environment surrounded by people interested in learning something, and being exposed to professors and instructors that are experienced in the subject, can't possibly be matched by learning on your own. That's like saying you can learn martial arts just fine by yourself, as opposed to with good teachers and trainers. If you went to school and you actually believe that, then you missed a good opportunity to get a lot out of University that was available to you. When I was in University (twice) I had the opportunity to study under some world-renowned experts in economics, history, finance, and mathematics. There's no way I would have gotten anywhere near those guys on my own.

Also, there may be many people without education that are doing quite well, better than some with education, but you must know that they are exceptions, as opposed to the rule. It's been well documented pretty much everywhere, that people with higher education generally have higher incomes. It's just frankly impossible to dispute that fact.

You're right, degrees prove that you spent X number of years to study something at a school. You say that like it's a bad thing. What is a degree supposed to mean?

I agree that being smart and having an education aren't the same thing, but this idea that education isn't important or doesn't help you in life is just plain wrong. The biggest problem in our society (and I think even MM would agree) is that the level of education in our population is inadequate.

--- D

Learning factories provide a valuable service, for sure. Where would society be without them? I believe they are especially handy for the borderline bright and motivated. A great way to standardize knowledge and skills and to send a young person into the world.
Most of us are average(well, duh!) Those that are way above average would know how to maximize a university education and wouldn't use the confines of the school as an excuse not to learn outside the scope of what the school offers.
I also believe a highly motivated bright person could go toe to toe with anybody on a lot of subjects because, well, the info is out there for anybody to access. MM might be one of those.

[Angus Argyle]

This is a very good article (imo) of the bailout and what is happening in the US right now.

http://www.truthout.org/021009T

[Teek]

I was having a fun conversation with a friend over MSN yesterday.

President Obama was promising to create 4,000,000 jobs using $800B, which would hopefully save the economy. (There's some discussion as to whether it can, and whether that money can be spent quick enough to help the recession). But I'm a math snob, and I was realizing that if he just wrote a blind cheque for $50,000 to each person of that 4M people, it would only cost him $200B. He could hire them for 2 years for $400B.


There.
I just saved the US $400B over two years. And that took me about 5 minutes. Imagine what I could do if I spent time on the issue!

[Angus Argyle]

I was having a fun conversation with a friend over MSN yesterday.

President Obama was promising to create 4,000,000 jobs using $800B, which would hopefully save the economy. (There's some discussion as to whether it can, and whether that money can be spent quick enough to help the recession). But I'm a math snob, and I was realizing that if he just wrote a blind cheque for $50,000 to each person of that 4M people, it would only cost him $200B. He could hire them for 2 years for $400B.


There.
I just saved the US $400B over two years. And that took me about 5 minutes. Imagine what I could do if I spent time on the issue!

Teek for Prime Minister. That's genius..

I did read that some countries are battling this recession by giving out credit cards with set amounts on them to their citizens. This creates more spending because they can only be used for retail purchases and such. Simple, yet smart if you ask me -you didn't, but I said it anyway.

[Duster929]

I was having a fun conversation with a friend over MSN yesterday.

President Obama was promising to create 4,000,000 jobs using $800B, which would hopefully save the economy. (There's some discussion as to whether it can, and whether that money can be spent quick enough to help the recession). But I'm a math snob, and I was realizing that if he just wrote a blind cheque for $50,000 to each person of that 4M people, it would only cost him $200B. He could hire them for 2 years for $400B.


There.
I just saved the US $400B over two years. And that took me about 5 minutes. Imagine what I could do if I spent time on the issue!

Actually, I think you just created a permanent cost item for the government of $200BN, per year, in perpetuity. Which costs a lot more than $800BN. The whole point of creating jobs is to create jobs that eventually add enough value that they become self-funding. And sitting on your hind end cashing a $50K a year government cheque doesn't exactly create value...

--- D

[Vlad]

Teek for Prime Minister. That's genius..

I did read that some countries are battling this recession by giving out credit cards with set amounts on them to their citizens. This creates more spending because they can only be used for retail purchases and such. Simple, yet smart if you ask me -you didn't, but I said it anyway.

Nothing new, I'm afraid. They are trying to apply the principles of John Maynard Keynes. The trillion dollar questions are: did it work the first time (30s) and will it work today, let alone is it even implemented properly?

"The government should pay people to dig holes in the ground and then fill them up."

That may have worked when the government had massive reserves to finance it. How is it going to work when the government that's already more than ten trillion in the red pulls another couple of trillion out of it's hat?

Bailout, stimulus? Same crap, different terminology.

[Teek]

Actually, I think you just created a permanent cost item for the government of $200BN, per year, in perpetuity. Which costs a lot more than $800BN. The whole point of creating jobs is to create jobs that eventually add enough value that they become self-funding. And sitting on your hind end cashing a $50K a year government cheque doesn't exactly create value...

--- D

Never have my Prime-Ministerial hopes been dashed so quickly.

Arguably, the US wants to create jobs through massive public-works projects, which would improve the infrastructure (read: crumbling bridges that are killing people), as well as just create jobs. But it creates the same problem: that as soon as you stop funding, the public-works projects stop, and you have a lot of construction people out of jobs. Then the support jobs for those industries (ie, construction vehicles, etc etc) go away too.

On the other hand, we (my friend and I) continued our fun conversation with a reference to Brewsters Millions. Give everyone cheques for $50,000 for the first year, and tell them they have to spend $48,000 to get the next years cheques for $50,000.

That will actually prevent hording of the cash. Assuming it was collected at roughly 30% tax rate, you'd actually get back $60B of your original $200B spent: which means the Teek for Prime Minister Plan only actually costs $320B.

I keep getting better and better!

[Angus Argyle]

Giant Money Hole

[Duster929]

Nothing new, I'm afraid. They are trying to apply the principles of John Maynard Keynes. The trillion dollar questions are: did it work the first time (30s) and will it work today, let alone is it even implemented properly?

"The government should pay people to dig holes in the ground and then fill them up."

That may have worked when the government had massive reserves to finance it. How is it going to work when the government that's already more than ten trillion in the red pulls another couple of trillion out of it's hat?

Bailout, stimulus? Same crap, different terminology.

Like most things, simplifying something may help to understand it, but it doesn't help to make effective decisions about the implementation of something.

Saying that Keynesian fiscal policy was used once before (in the 30s), and comparing it to today, is a huge oversimplification. Yes, it was used in the 30s, and its effectiveness can be debated, as to whether it ended the depression, or merely helped make it shorter. But expansionary fiscal policy has been in use in most countries in every decade since then. No, it's not always implemented properly, but that doesn't mean it doesn't work.

The biggest problem with using fiscal policy is the issue of "crowding out" private spending. If the government starts spending money on things that the private sector should be doing (for example, funding renewable energy programs), then the effect will be minimal. Without the government's intervention, the same money will be spent, but by other people. If the government spends money on public goods, such as the military, police forces, health care, public infrastructure, then the spending can have real multiplier effects.

That being said, monetary policy is perhaps a more effective lever. This is what we see as "setting interest rates", although it's more complicated than that. The government can provide stimulus by attempting to influence interest and inflation rates, and thereby the money supply.

It's hard to say whether one or the other is more effective, although there's decades worth of academic debate on the issue. The fact is, properly executed, they both have their proper place as policy tools. Saying that fiscal policy is Keynesian, and was only used in the 30s, to no effect, is really oversimplifying it.

--- D

[Vlad]

Saying that fiscal policy is Keynesian, and was only used in the 30s, to no effect, is really oversimplifying it.

I didn't say that, but I appreciate the clarification