Sunday, November 2, 2008

Goldman Sachs and Public Idiocy

http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package--6bn-bail-out.html

A bailout is "Rewards for failure"?

Suppose the government did not do anything. People see banks close. Their money is disappearing. What are they going to do? They're going to withdraw the rest of their money, and they're going to be hoarding what they do have. Problem is, banks can't function if people aren't putting their money in them. And economies can't function if people aren't injecting money into it. Last time this happened, it was that happy joyful occasion known as the Great Depression.

This is why government bailout is necessary. The people need to have confidence in the economy. They need to know that their banks aren't going to collapse, leaving them penniless hoboes. The banks, in turn, need to be spending the money that the government gives them. Money does no good for the economy if everyone hoards it - it must be used so that goods and services are flowing as normal.

And this is why I don't like the vast majority of critics. Too much complaining, not enough ideas on how to make things better.

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