Just before I left for Korea last year I had a little bit of money to park in a cd. I was looking for a completely stable investment that would earn some interest while I was away.
I consulted a brokerage firm, which tired mightily to push me to invest in something with the greater promise of a return, though no FDIC insurance. When I mentioned that I was worried about that and preferred an insured investment, the stooge at the investment firm said something like "the day you have to worry about FDIC is a day you'll have much bigger worries."
Now it is clear that such a day where the unthinkable happens in the market has arrived. Turns out we do have these worries. However, the Federal government has virtually no hesitation to change all of the "free market" rules it had touted at a moment's notice, all to rescue irresponsible banks and investors of all stripes from bad choices made out of delusion, criminality, greed, or just plain old interest in making a buck.
Didn't invest in one of the low-rate but insured bank instruments for a higher rate money market? No problem--now those investments are covered. Bought too expensive a house with no means to pay for it--no problem, the taxpayer will bail you out. lent too much money out in a bad loan out of stupidity or greed? The taxpayers will be happy to see you. Made bets you can't cover?--no worries, Uncle Sam has deep pockets.
As a historian, I am not surprised by these wild swings in the business cycle, just a bit surprised by the response of an administration that only as recently as 2004 declared it intended to spend its political capital by privatizing Social Security. There are some historical perspectives of the crisis here.
This all does make me wonder what kind of lessons as a citizen and taxpayer to draw. I live in a marginal neighborhood I can afford, pay my bills on time, and have made conservative choices in investment to avoid losing money that is difficult to earn (because, remember, I am an underpaid academic). I guess the real word for carefully managing my resources is "sucker".
It occurs to me to view a government that nationalizes business and manipulates market rules arbitrarily in order to save financial and corporate elites as something akin to unapologetic and unabashed corporatism. Then again, a government that nationalizes business and arbitrarily manipulates market rules and invades people's privacy, abducts and jails people arbitrarily and illegally, embraces torture, and launches illegitimate and unnecessary wars, is perhaps something akin to fascism.
I consulted a brokerage firm, which tired mightily to push me to invest in something with the greater promise of a return, though no FDIC insurance. When I mentioned that I was worried about that and preferred an insured investment, the stooge at the investment firm said something like "the day you have to worry about FDIC is a day you'll have much bigger worries."
Now it is clear that such a day where the unthinkable happens in the market has arrived. Turns out we do have these worries. However, the Federal government has virtually no hesitation to change all of the "free market" rules it had touted at a moment's notice, all to rescue irresponsible banks and investors of all stripes from bad choices made out of delusion, criminality, greed, or just plain old interest in making a buck.
Didn't invest in one of the low-rate but insured bank instruments for a higher rate money market? No problem--now those investments are covered. Bought too expensive a house with no means to pay for it--no problem, the taxpayer will bail you out. lent too much money out in a bad loan out of stupidity or greed? The taxpayers will be happy to see you. Made bets you can't cover?--no worries, Uncle Sam has deep pockets.
As a historian, I am not surprised by these wild swings in the business cycle, just a bit surprised by the response of an administration that only as recently as 2004 declared it intended to spend its political capital by privatizing Social Security. There are some historical perspectives of the crisis here.
This all does make me wonder what kind of lessons as a citizen and taxpayer to draw. I live in a marginal neighborhood I can afford, pay my bills on time, and have made conservative choices in investment to avoid losing money that is difficult to earn (because, remember, I am an underpaid academic). I guess the real word for carefully managing my resources is "sucker".
It occurs to me to view a government that nationalizes business and manipulates market rules arbitrarily in order to save financial and corporate elites as something akin to unapologetic and unabashed corporatism. Then again, a government that nationalizes business and arbitrarily manipulates market rules and invades people's privacy, abducts and jails people arbitrarily and illegally, embraces torture, and launches illegitimate and unnecessary wars, is perhaps something akin to fascism.
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