Everyone seems to want one, but apparently a lot of Americans aren’t sure what exactly a “bailout” is.
The word, which shot to prominence amid the financial meltdown, was looked up so often at Merriam-Webster’s online dictionary site that the publisher says “bailout” was an easy choice for its 2008 Word of the Year.
The rest of the list is not exactly cheerful. It also includes “trepidation,” “precipice” and “turmoil.”
Meanwhile, a vacationing Cactus says the bailout will not work:
As I’ve stated several times before, its long past time to let the structure go. Saving the elixir salespeople is simply not a worthwhile goal; in fact, its counterproductive. And as we’re seeing, tremendously costly.
Maybe, just maybe, in a world without elixir salesmen, car companies will go back to making cars people want to buy (and not being finance companies), bright young students will choose to study engineering or science rather than learning how to be scam artists, and people putting their 40 years on the assembly line will be able to afford a house whose value doesn’t drop precipitously, and walk away with a solid pension. It sure as heck ain’t gonna happen as long as we keep bailing out Goldman, Welfare, Queen & Sachs. The elixir salesmen will see to that.
Nobel laureate economist Paul Krugman says a “Citigroup bailout was necessary — but this bailout is an outrage: a lousy deal for the taxpayers, no accountability for management, and just to make things perfect, quite possibly inadequate, so that Citi will be back for more.” More here.
And Liar’s Poker author Michael Lewis says this on journalists’ coverage of the bailout:
I think the journalism for the last six or eight months of this crisis has been pretty magnificent, but there is this — nobody wants to be stupid. You know, once you’re in the room with the Treasury Secretary or the CEO of a Wall Street firm or even just some hot shot Wall Street trader, you don’t want to seem like the idiot journalist who doesn’t know what this is or why this works, because the natural response from the authorities is to ridicule you.
But the obvious questions are usually really the best questions. So, like, the obvious question now? Alright, Hank Paulson, Treasury Secretary, you just gave 200 billion dollars to banks to make loans, banks that have proven they were bad at making loans because they would be bankrupt without you giving them money. Why give them the money?
And you get back gobbledygook to preserve the financial order, restore stability. How does that restore stability? All it does is encourage the same bad behavior.
Lewis has a new book out Panic: The Story of Modern Financial Insanity that returns to five of the most recent market meltdowns and analyzes what reporters thought was happening before, during and after each of them. And in a Portfolio piece titled The End, Lewis returns to his old Liar’s Poker haunts to figure out what went wrong.