Concerned only scratches the surface
For those of you who stare at the screen whenever someone mentions the financial crisis, yet hasn’t the beginnings of a clue as to what it all means - this week’s This American Life is absolutely for you. It’s 60 minutes. Take the time.
I’ve listened to this episode four times. I will more than likely listen at least that many more so it all sinks in. Not because it’s hard to understand, because it’s not - more because I want to hang onto every nuance of this. It’s easily the most complete and clear explanation of why the world’s economy is going blooey I have heard to date. It doesn’t point fingers - well, it does a little, but it’s not at any one particular person or party - but it explains how our markets got into this mess.
The getting out? Not so much. It does discuss the Paulson plan, as well as a rather tantalizing alternative…which seems to have made it’s way into the final bill under the noses of those who most did not want it in there (read: big commercial banks and others who want the money from this plan without suffering the consequences of receiving said money).
As one of the reporters in this story says (and I wholeheartedly agree with), “I want people to be able make money, I just don’t want their mistakes to cost me, and that’s all I’m asking about.” That’s my question. And it seems to me it’s very easy to blame people on the consumer end - people who should not have been able to receive money to buy a house, and blame them for the system. But that’s a simplification - just as pointing the finger at one party or another is a simplification. To steal (and then bludgeon to death) a line from John McCain (who has been unsuccessfully attempting to steal the line of thought from his opponent) - Be sure my friends, blame is coming. But by the time this blame arrives, will there be a reason to care anymore? With every passing day, I’m becoming more convinced there won’t be.
Roger wrote:
It’s interesting to see the coverage on this side of the Pond as well. Most Brits realize that it’s the US that got us into this mess, but are chagrined to see how much the UK economy is intertwined with the US. First they kick Tony Blair out of office for being too much of an American lackey, now they see how much the pound is tied to the dollar.
I don’t know how much play this is getting in the US, but this is the first real economic crisis the EU has had to deal with, and at least today it’s showing signs of strain. Last week the Irish government guaranteed 100% of all deposits in Irish banks. This got the rest of Western Europe banks in a tizzy because they were afraid of a mass desertion of domestic banks for Irish ones.
Angela Merkel comes out and denounces Ireland’s unilateral action for not consulting with the EU and the European Central Bank. Then yesterday she announces that the German government will do the same. Britain just annouced that they’re upping the guarantee to £50k, similar to the FDIC’s increase last week.
The euro has mostly weathered the storm so far, but we’ll see what happens to it now. It’ll also be interesting to watch whether the EU pulls together or apart over all this.
It’ll be even more interesting to see whether I can keep my job, seeing as how I work in a bank.
Posted on 07-Oct-08 at 11:25 am | Permalink