Am I the only non-enonomist out here who suddenly finds the topic of the economy very interesting? First, I find out that I have a friend whose house, bought six months ago, has declined 35% in value - of course, that's if she could sell it at all. Then, I realize that this Bear Stearns bailout is going to cost taxpayers an average of $100 each, a government loan that involves no collateral and no consequences should the whole thing fail and go belly up - not a far-fetched notion these days.
This whole Bear Stearns thing is fascinating of itself. They sold the company at a 93% discount, which means the whole kit-and-kiboodle went for much less than the value of its headquarters building. Why? Because the company was too big, would do too much damage to the economy, to let fail. That may be, but doesn't that cause a re-evaluation of how our version of capitalism works? Because capitalism without failure isn't capitalism; it's nothing. The theories upon which our "new" economy seem to be based upon - the idea of fixing a problem caused by an egregious debt -to-asset ratio by assigning more debt - seem to be just that: nothing. This is an emperor wearing no clothes situation if there ever was one and it sort of scares me.
Now, I don't want the economy to fail. Most of my immediate family is invested in it in some sort of entrepreneurial fashion and should everything falter, their income falters. Should their ventures collapse, there will be no major initiative to protect their hopes and schemes - however well thought-out and fundamentally sound (which is more than you can say about the hopes and schemes of all of these MBA types and their robber-baron masters). That crazy guy on CNBC told people last week to keep their money in Bear Stearns - why does he still have a job? Why would he want it? Of course, he's just a TV guy, a stand-in, a far-too visible scapegoat for people like me, people humble enough to know that they don't have any answers to this mess, yet wise enough to see that the answers being proffered by the government and the business community which owns it are sheer nonsense.
