I always here things from mainstreamers along the lines of "well I wish that we didn't bailout the banks, but we HAD to, the country would have collapsed if we didn't"
so my question is, what if on some night in September of 2008 some scientist managed to implant an Austrian Chip into the brain of every member of the house of representatives, senate, white house, federal reserve, US treasury department, and the SEC.
what would have actually happened? I guess there is no way in knowing how bad it would have been, but all we can say is that ultimately it will be worse later on?
what if everyone in government went into a 6 month coma starting in September '08? would we be in a better place now?
ok well if I couldn't get any reply to that, maybe too hypothetical, but still something that I think needs to be answered because people get away with saying that the government saved us all the time.
Couple historical questions then:
How much of the 'roaring 20s' was some decent presidents not doing much and the economy doing well and how much was it a boom that fueled the stock market crash?
Also, what is the explanation for why it has taken so long since the end of the great depression for us to get into this big of a hole? (maybe I am just underestimating some of those slowdowns in the 70s and early 80s?) How did the country manage to go so long in between busts the last 2 decades?
My take is that the US economy would have come down like a house of cards. The banks would have gone bust, the stock market would have plummeted and many businesses would have gone belly up. Perhaps rioting would have been the norm and…who knows martial law would have been imposed. From then on it’s the new Third Reich. But that will happen anyways within the decade, so better to have had it sooner rather than later.
The last time some one tried to marginally free an economy dependent on malinvestment was Gorbatchev’s Perestroika. It is indeed a great testament to Miki that he managed to control the military and avoid bloodshed, but one thing is clear: after an economy passes a certain point of corporatism, there is no coming back, only coming down.
That is not a very mainstream thing to say. Most people opposed the bank bailouts.
Peter Schiff talks about this in his talk @ Google.
http://www.youtube.com/watch?v=tU8jCa_dKTM
For example he points out that the firms who were making losses aren't / weren't the only firms, and so why should failing firms be bailed out when better firms could simply take over their business?