Paul Krugman has been making the rounds of the network morning shows, urging the government to "go big" in spending to revive the economy. His only concern is that Obama might not be planning to spend enough. Heck, even FDR wasn't a big enough spender in his book. View Krugman's weekend GMA appearance in which he says that here, the episode in which, as discussed here, Krugman of all people had to talk Kate Snow down from her fantasy of Obama "forcing" the Bush administration to adopt his policies.
None of the network shows had anyone on to debate Krugman. But the Early Show did invite Jim Rogers in today to give very much the other side. The legendary investor's take: let the banks fail. The massive bailout underway will put our country in hock for decades. Almost 20 years later, Japan has still been unable to get out of the hole it dug when it, like the US now, decided certain institutions were too big to fail.
JIM ROGERS: Unfortunately, those turkeys in Washington are bankrupting you and me and our children and everybody watching this show to save their friends on Wall Street. I find it outrageous. I find it morally outrageous, and it's bad economics.And a bit later . . .
ROGERS: You and I are going to get to pay higher taxes, and our childen are going to have inflation and higher taxes. It's outrageous.What do the free-marketers out there say? If you could, would you let creative destruction have its unfettered day?
HARRY SMITH: We talked to Arthur Levitt last night, he says, you know what? We can't allow these institutions to fail. Is that true?
ROGERS: He is absolutely wrong. Banks have been going bankrupt for hundreds of years. Investment banks have been going bankrupt for hundreds of years. It's not the end of the world. You need to clean out incompetency.
SMITH: What would happen, for instance, if what happened to Lehman happened to everybody else? If all of a sudden we woke up tomorrow and all these institutions down on Wall Street didn't exist anymore?
ROGERS: Harry, we would have a very bad couple of years. But you know what's going to happen now? We're going to have a very bad decade, all of us. Let a million people on Wall Street suffer. There are 300 million Americans. We're going to all suffer for maybe a decade, maybe two decades. The Japanese did this in the 90s. They wouldn't let anybody fail. Two decades later they're still trying to recover from the problems because they wouldn't let anybody fail.
—Mark Finkelstein is a NewsBusters contributing editor and host of Right Angle. Contact him at mark@gunhill.net.
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Rogers is warning what is coming
November 25, 2008 - 10:30 ET by PopularTechJim Rogers: Government Creating an Inflationary Holocaust (Video) (7min)
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He's right...
November 25, 2008 - 10:49 ET by ChiefMinionLet them fail. That is the only way to sweep the incompetence to the side and influence future behavior. All the bailout mania is doing is rewarding stupidity. It can hurt a lot now or hurt a tiny bit less but for the rest of our lives.
Insanity
November 25, 2008 - 10:52 ET by VegasGuyOne either believes in the basic mechanics of free markets (I do.) or one does not. One positive aspect of free markets is that businesses fail, releasing assets for more efficient use. And this does not happen at random. There can be many reasons, but whatever the contributing cause(s) one thing is certain: the businesses have proven that they are incapable of functioning as viable financial entities in existing market conditions. Bankruptcies serve a useful purpose. Let them occur.
Fatal "new" market conditions are not instantaneous. They occur gradually over time without being properly addressed by management and entrenched business cultures. Throwing huge amounts of tax money at proven failures is just insane and essentially amounts to rewarding incompetence. As for throwing the money and then putting government in charge while transferring the underlying problems to taxpayers - words fail.
I work for a small hometown
November 25, 2008 - 11:16 ET by marpelI work for a small hometown Bank. A very strong Bank, among the strongest in Texas. It's because they made no subprime mortgages. Our collections department is made up of 2 people. We've had 6 car repos this year. Yes, we're tightening our lending policies, but we are strong.
I feel that if the big box banks fail, then let them fail. I used to work for WaMu. During the 3 yrs I was there, I was laid off 3 times. Each time, I landed in another department. I got sick of it and went to work for the stronger local bank. They don't pay as much, but job security won over income.
I'm hurting financially, but at least I know I'll come to work every day and be able to put food on the table. It's not steak anymore, but it's good food.
Again, just let those suckers fail...and that goes for those bloated jerks who ran the car companies into the ground with their extravagant lifestyles.
I believe in consequences
November 25, 2008 - 11:24 ET by andophiroxiaI believe in consequences as a result of actions. If you run up a lot of debt, be prepared to pay it off. It would be nice if someone paid it off for me, but real life doesn't work that way. Hence, I have to be careful with my spending.
I work a lot of hours myself as I'm trying to start a business. However, I know it's not going to be easy with not a lot of free time off. Yeah, you get your whiny moments, but as long as you keep your head down, you'll get out of it.
I view this bailout as them sticking their head in the sand. Unfortunately, the sand is eventually burying them, and we have to dig them out? Some of my friends go the deficit is our responsiblity and that when Obama's welfare checks come in they'll just pay it back to the treasury and I go, "No it's the limit on the Government's 'credit card'. I am not responsible for their bad spending." In a sense, they're returning my money, but I'd rather not have it as wealth redistibution but as just lower taxes with things I can agree on (military, infrastructure, border control, and border protection.).
I say the Government works off this debt--like how all of us Americans have to work to pay off our own debts and make a living.
“You have enemies? Good. That means you’ve stood up for something, sometime in your life.” ~ Winston Churchill
Let them fail
November 25, 2008 - 12:03 ET by bioteachedI agree with him completely. Harry Smith is an idiot if he thinks that by letting those irresponsible banks fail will mean the end of things on Wall Street. There are small banks all over Florida that are screaming that they have money to lend, but no one is taking. If the "big boys" fail, it will only create opportunity for those that were responsible to succeed.
Besides, where do you draw the line in what is too big to fail? This is a very slippery slope we are on right now and we are already seeing the results. AIG was bailed out, and the Big 3 came running. Now, this week Citigroup is bailed out . . . who do you think will be the next in line? It is going to become a never ending handout line and those at the end are going to cry about things not being "fair" which seems to be the liberal mating call!
We all need to get active and tell our representatives to stop this madness. Enough is enough! Bailing out children never teaches them personal responsibility. Let's treat the banks like the irresponsible children like which they were acting.
A voice of reason, finally!!!!
November 25, 2008 - 12:16 ET by c5thenWho's the twit who thinks that Lehman Brothers doesn't exist anymore??!!!
Of course they 'exist'. They are just part of JP Morgan who was given a huge loan guarntee to buy them. In a macro-economic view, it doesn't matter what the name is on the building or who is issueing the credit card. The deposits and the collateral and the loans don't go away, they just get bought by someone else.
So what if Citi and AIG and the other 'troubled' institutions had to sell off parts or even all of their companies to cover their bad investment decisions? They would be bought by stronger institutions and the world would continue. Sure jobs would be lost and values would drop.
So freakin' what!!!
Hey, I got the wrong "CHANGE"!
Alan Keyes / Sarah Palin - 2012
The voice of reason has been laughed at for years
November 25, 2008 - 12:26 ET by PopularTechPeter Schiff Was Right 2006 - 2007 (Video) (10min)
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Popular Tech
November 25, 2008 - 15:25 ET by RESTLESS 1That vid is f-ing wild. Peter is owed so many apologies, he'd have to outlive Methuselah to collect. The thing that is so idiotic about it is that it was obvious that he was right. Banking institutions were selling cheap for a reason. Add to that the increasing energy prices, another bubble that had to burst, and what we are seeing now should have been evident.
"This
liberal would be all about socialize -- uh, uh, would be about
basically taking over and the government running all of your companies."-Maxine Waters 2008
that man owes Peter a penny
November 25, 2008 - 15:36 ET by katainkentfake money is **** right!
SEVEN YEARS SAME AS CASH!? helllloooo....
member of the Conservative Independant Witness Protection Program since Nov. 5, 2008
PT, WOW great video
November 25, 2008 - 15:48 ET by upcountrywaterI wonder what he has to say about CRA?
and what solutions does he have to do the "fix"?
DEMOCRAT
Aclu</
where does your info come
November 25, 2008 - 13:22 ET by patmac49where does your info come from...lehman brothers did not become part of jp morgan...bear stearns did..lehman brothers ceased to exist as a stand alone entity and claimed bankrupcy..
Yes Lehman
November 25, 2008 - 14:37 ET by ahusserWas allowed to go into bankruptcy. But that is the rub. Now you have humans deciding which corporate entity needs to be saved and it's probably some guy from the Government (who probably doesn't know exactly why the entity failed you know was it just the economy, was it an outmoded business model, incompetence, bad decisions, cash flow etc. ad infinitum). To allow natural failure takes the human element with all its politics and prejudices mostly out of the equation (See the Automakers with Dems wanting to cut executive compensation but hands off to the unions which is a political decision), the entity lands in bankruptcy having to directly deal with the fact of their existence. They either come out, be absorbed, or left to die (after anything that is left is doled out to creditors).
Change: When the winds of change blow hard enough, the most trivial of things can become deadly projectiles. (On a Poster)