With a word-change here and there, and of course different visuals, BBC’s The Power of Nightmares works remarkably well for the current Financial Crisis.
Of course, a nightmare can manifest itself in reality. It is possible that the cries of Wall Street of Money, the cries of the Administration for Trust, and the cries of Congress for Power are well founded and not just a reflection of their perpetual desire for money, trust, and power.
We’re not given logical arguments for why such a thing might be true, other than vague arm waving, secret documents we can’t access, and the deeply held beliefs of truly incompetent people. Then again, even a stopped clock is right twice a day.
CNBC this morning informs us the government “does not want to” pay market prices for the subprime properties, that there is “no way” the government will recoup its losses, and so on. If true, this means that the Bush-Pelosi Bailout will be an ‘investment’ in the way that Head Start, welfare, and other government giveaways are ‘investments’ — the plan is foolish, but at least it’s somewhat better than simply burning piles of cash to heat the Congress.
What are the second order effects of this bailout. If Wall Street crashes, and ambitious young people give up on a career in Wall Street and instead focus on engineering, computer science, nursing, research, lives may be saved. On the other hand, if ambitious young people seek to maximize their profits by working in highly-profitable but risk-protected Wall Street firms, the cleverness will flow away from those fields.
How much money is going to be lost? What else can be bought with that amount of money?