Does America Need a Bailout?
November 17, 2009
Over the weekend I was going through articles that I had saved and I came across an article in the September 15, 2008 issue of Business Week Magazine that caught my attention. In light of all the current bailout discussion regarding the auto industry, the review by Christopher Farrell of Yale economist Robert Shiller's book entitled "The Subprime Solution" with the title of the article in bold print "Does America Need a Bailout?" concludes that this is a time that calls for dramatic action from Washington.
It will be interesting to follow the news as Congress reconvenes for a "lame-duck session". If the media is to be believed the bailout of the auto industry will be high on the agenda. Same legislators are of the opinion that government must intervene, others of the opinion that they deserve to be where they are because they didn't build the cars Americans wanted. In the midst of all the housing and financial crises of 2008, a government official reflects; "We cannot stand by when a house is on fire to engage in lengthy debates...In such a situation we instinctively utilize whatever method...offers assurance of speediest success."
Unfortunately, no one is certain of the appropriate methodology. What seems to be certain is that the ripple effect of an industry failure will have far reaching consequences. Were we not in an extraordinary financial crisis, the government's options might be different. As it is, just as some financial institutions were bailed out and hopefully some underwater homeowners will be bailed out, some industries may have to receive a bailout package.
I plan to read Professor Shiller's book and see what recommendations he has made.
Over the weekend I was going through articles that I had saved and I came across an article in the September 15, 2008 issue of Business Week Magazine that caught my attention. In light of all the current bailout discussion regarding the auto industry, the review by Christopher Farrell of Yale economist Robert Shiller's book entitled "The Subprime Solution" with the title of the article in bold print "Does America Need a Bailout?" concludes that this is a time that calls for dramatic action from Washington.
It will be interesting to follow the news as Congress reconvenes for a "lame-duck session". If the media is to be believed the bailout of the auto industry will be high on the agenda. Same legislators are of the opinion that government must intervene, others of the opinion that they deserve to be where they are because they didn't build the cars Americans wanted. In the midst of all the housing and financial crises of 2008, a government official reflects; "We cannot stand by when a house is on fire to engage in lengthy debates...In such a situation we instinctively utilize whatever method...offers assurance of speediest success."
Unfortunately, no one is certain of the appropriate methodology. What seems to be certain is that the ripple effect of an industry failure will have far reaching consequences. Were we not in an extraordinary financial crisis, the government's options might be different. As it is, just as some financial institutions were bailed out and hopefully some underwater homeowners will be bailed out, some industries may have to receive a bailout package.
I plan to read Professor Shiller's book and see what recommendations he has made.
posted by shirley harry at 8:05 AM
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