While I try to keep up with the news, like most Americans I really have only a vague picture of this financial crisis we’re in, and how to get out.
Here are a couple pieces of media I’ve found helpful in figuring out whats going on:
- This American Life did an excellent episode called Bad Banks which nicely explains the basic fundamentals of the banking industry.
- Last week I half jokingly told friends on Thursday I expected to wake up Friday morning to find that the government had taken over the banking system. One of my friends passed on this link to an excellent 60 Minutes* piece on what happens when banks fail and are taken over by the FDIC (short story: Don’t Panic).
I think the best line from either of those pieces is from the This American Life episode when professor David Beim states:
The problem is not the banks, greedy though they may be, overpaid though they may be. The problem is us. We have over-borrowed. We have been living very high on the hog.
And now, the rest of the story…
But this is a blog! I can’t just post some links without expounding upon my own poorly informed views! I’m an American dammit!
So here are some of my current thoughts:
- I’m pro stimulus package. If there’s ever a time for deficit spending its when the economy is in trouble and people need jobs. The wrong time for deficit spending is to destroy and then rebuild sovereign nations for no good reason.
- I believe the government should Take over all the failed banks. These too-big-to-fail behemoths should be taken over, parceled up, and sold off. Too-big-to-fail is unacceptable. The tax payers would probably end up paying a price for this, but consider it the War on Bad Banks. Over the past 8 years we’ve paid billions to fight a mostly phony “War on Terror”, why not spend billions on something that would have a positive result for humanity?
- In the future we need regulations similar to anti-trust laws to prevent so few corporations from wielding so much power. In the computer world we turn to distributed systems to provide redundancy in case of failure. The non-geeky world has a nice little saying for this: don’t put all your eggs in one basket.
* I hadn’t seen the 60 Minutes in years. The journalist doing the story kind of annoyed me, but overall I thought it addressed something on the minds of many Americans in a very personal way.