So I know a little bit about economics. Like how shifts in supply and demand affect prices and quantities of goods exchanged. My minimal understanding of econ actually informs my opposition to the War on Drugs. (Which, by the way, it seems like we’re getting close to ending, since Obama chose the police chief of a stoner Pacific Northwest municipality, and since a serious Republican presidential candidate has come out in opposition to it.)
But I don’t know a lot about macroeconomic theory, or, more importantly, history, because I find it boring and forgettable (unless it’s told by Niall Ferguson), so I’m more attracted to broad, institutional solutions to the economic crap-fest than the specific, complicated solutions.
So this is what Richard Painter, U MN Law Professor, suggests we a lesson we could learn from the last 2 centuries of economic peaks and troughs.
Finally, perhaps because we value the type of government we have and the experience that private sector jobs bring to government, we might consider a radical idea: no more bailouts. We will have to avoid allowing companies to get “too big to fail”, through antitrust laws or otherwise, or alternatively figure out a way to protect the rest of the economic system when a big company does fail. Whatever is done, we cannot escape the fact that bailouts and ethics don’t mix. We found this out in 1789 and we should know this now.
And this isn’t to be taken in a totalitarian, devotion to the government way. We like our government because it tries to be transparent and efficient. When the government takes over banks, those objectives are at odds with one another. If it discloses all information about which banks are taking loans, then we lose a ton of money. If it tries to be financially prudent in governing the banks, it keeps secrets from us. The best choice seems to be to reject the game outright.
Sometimes a huge company going bankrupt isn’t so bad, relative to the alternatives.