| > bailing out the banks and auto companies that should have collapsed. 'Should' is doing a lot of work in that sentence. Should a business that's selling $10 bills for $9 collapse? Yes, that's pretty obvious. Should a business that's consistently selling $10 bills for $10.05, but requires access to short-term liquidity that completely evaporated overnight to function, and is now not functioning, because some other unrelated part of the economy is sick, and all flow of credit has stopped? Should that latter business fail? Who's going to be better off for it failing? Even if killing that business will create an economic catastrophe, as well as a mountain of geopolitical concerns that are the consequences of de-industrialization? [1] On a metric of anything but ideological purity, the fed stopping the economic collapse where it did was a bargain at twice the price. [1] Just ask Russia in 2022 how well de-industrializing all of its inherited Soviet economy has worked out for it. It's now in the unenviable situation where its domestic production can't even sustain a Soviet-era standard of living, without relying on now-sanctioned foreign trade. All because it hyper-optimized on growing the 'productive' parts of its economy (Oil, oil, gas, oil, and gas), and let the unproductive parts (all that old, crappy, internationally uncompetitive Soviet industry) rot away. |
I don't think that the janitor at GM "should" have lost his job. It would have been nice if everyone lying about the real quality of the MBS products lost all the money they made though