The collapse of Bear Stearns is giving the entire financial industry a massive black eye. If we’re not careful, we’ll see a KO punch land square on the jaws of the global economy and not just the financial industry if this keeps up.
Confidence is at an all time low, but bailouts are salvaging the reputations of dismally run organizations.
The question is “why”?
In the ‘dog-eat-dog’ world of efficient markets and once-proud capitalists, why are these folks always the first ones running with their hands open, seeking a bailout? Why is it that $200 billion (now more) gets spent in the blink of an eye while schools, hospitals, renewable energy programs, social assistance, unemployment insurance, fair housing, charities and other organizations are selling off their chairs and black boards so that folks on Wall Street can blast blindly through billions without a care in the world?
Somebody’s gotta pay for this and we all know who it’s going to have to be. Us. Well, I’m Canadian and I don’t think our country is in the dismal shape that the US is in (although the Harpies are doing their best through tax cuts to get us there).
I’d like to re-iterate a theory from Naomi Klein in her outstanding book “The Shock Doctrine”: the outset of the Great Depression brought on the New Deal. Americans were so pissed with the corporate world, what with its gluttony and irrefutable disregard for the majority of employees and consumers that without the New Deal, the US certainly would have descended into communism. Every American and Canadian should read this book to get a grip on what might have happened to North America had it not been for government bailouts in the 30s and a war in the 40s.
OK. I get that. So what’s going to happen now? The only people with a black financial statement are the Chinese. And we’ve been kicking them in the junk for the last 30 years. What are they going to do when the US goes under? Are they just going to shower us with praise and say ‘hey, it’s OK. Here’s a trillion or two.’
Or are they going to laugh all the way to the bank. One that’s owned by the People’s Republic of China?