In Study, 2 Economists Say Intervention Helped Avert a 2nd Depression

[Roland99]

In Study, 2 Economists Say Intervention Helped Avert a 2nd Depression
http://www.nytimes.com/2010/07/28/business/economy/28bailout.html?_r=1

Like a mantra, officials from both the Bush and Obama administrations have trumpeted how the government’s sweeping interventions to prop up the economy since 2008 helped avert a second Depression.

...

Now, two leading economists wielding complex quantitative models say that assertion can be empirically proved.

In a new paper, the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration’s fiscal stimulus program, the nation’s gross domestic product would be about 6.5 percent lower this year.

In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation.

No surprise that it staved off a total financial meltdown. It's just the thought of using taxpayer-funded money to bail out these criminals to save us all from their crimes and misdeeds that leaves a bitter taste in our mouths and a leaky roof over our heads.

[ixion]

1. Yes, it is fairly obvious that pumping hundreds of billions of dollars into the system

will temporarily stabilize that system.

It DOES NOT mean, however, that what caused the meltdown in the first place has been fixed. It hasn't.

So the depression was averted only temporarily, and actually made worse by the daylight robbery, er 'bailout'.

[Roland99]

4. Still hanging by a thread

Commercial real estate has been teetering on the edge for a couple of years now. If it falls off, look the **** out.

[Donnachaidh]

5. and the financial *reform* that did nothing to avert the too big to fail problem

But hey, some retiring reps will have cushy jobs waiting for them. :sarcasm:

[Tansy_Gold]

2. "Complex quantitative models"?????

That means they started with the answer and created a formula that produced that answer.


Bullshit.




Tansy Gold, who has seen cooked books before

[bemildred]

3. Somebody inform them that it's not over yet. Not by a long shot. nt

[jtuck004]

6. I am astounded , amazed, totally shocked and surprised...

that Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, did a study and found
that the "bailout" plans orchestrated by Ben Bernanke, a current Fed. Reserve Chairman and former Princeton
professor averted another "Great Depression", JUST LIKE BEN BERNANKE SAID IT WOULD. He did this by creating
an economic model with assumptions he designed and, by golly, it worked out just like it was designed to work
out. Who could have predicted this?

And they are supported by no less than Mark Zandi, chief economist at Moody’s Analytics, from a company
that for the past decade has presided over a ratings-for-remuneration racket for hedge funds whose actions
have done more to undermine the economic structure of this country, vaporize the jobs of 15 million or more
people, and leave millions of people without a home. A company so bad that specific sections of the recently
passed financial regulations legislation were written to target their bad actions.

As trustworthy as these folks are, maybe they should get into testing for the baby food industry. Or maybe pharmaceuticals.

[notesdev]

7. It didn't stave off anything

by pumping almost pure waste into the system they just served to further dislocate the economy with false demand in an attempt to kick an ever-heavier can down the road. A trillion dollars of stimulus and $4 trillion in bailouts and other subsidy nonsense bought us mere months, and now we're back in the same position we were in before it with even worse prospects moving forward.

[ixion]

8. exactly...

and exactly what we said the result was going to be when they did it, but they went ahead and did it anyway because at the end of the day they serve the top one percent.