At 9/29/08 07:48 PM, Der-Lowe wrote:
At 9/29/08 06:20 PM, MattZone wrote:
Nobody's fucked. The worst that is going to happen is that several companies who made some huge mistakes are going to collapse, and lots of other companies are going to swoop in and pick over the corpses for some choice pieces. A whole bunch of people are going to be looking for new jobs, very likely at the same companies who buy up the pieces of their former employers.
Capitalism is a Darwinian process. Let the losers get eaten.
Not. At. All.
Firstly, Darwinism and any social-related word don't go in the same line. Ever.
Your opposition to social Darwinism is noted. It is also counter-factual, and thus irrelevant. The world works the way it works, whether we want it to or not. Capitalism is, by design, a competitive system. As with any competition, there are winners and there are losers. Socialism/Communism tries to avoid this and make everyone a winner, but has historically done the exact opposite. Churchill was right when he said "Capitalism is the worst form of economic system, except for all those other forms that have been tried from time to time."
Secondly, your analysis is disastrous. These aren't normal companies. These are banks. When banks collapse, everyone collapse.
Wrong. The only banks that aren't "normal" companies are the Federal Reserve Banks, and they aren't in danger of failing. As for the rest of them, every single one of the banks in question could fail and all that would happen is that other banks would buy up the pieces.
They create a major contraction of the money supply, screw all those who had deposits in them, reduce the wealth of the nation, and make the whole economy crash.
Wrong on all four counts. First, none of these banks control the money supply, the Federal Reserve Banks do. Second, all checking accounts, savings accounts, and money market accounts are FDIC insured, which means depositors won't lose a dime. Third, "the wealth of the nation" is a meaningless phrase. It has nothing to do with the Treasury, or the Federal Reserve Banks, or GDP, or any other meaningful measure of economic stability or output. Last, the whole economy does not depend on a few large banks. It doesn't depend on the housing market. It depends on three things: the goods and services that Americans produce, the amount of money issued by the Treasury relative to said goods and services, and the continuing consumption of said goods and services by both Americans and foreign buyers.
1) American banks crash
2) The American economy crash
3) Being American banks the 60% of the world the world financial system crashes.
4) The world economy crashes.
5) I can't buy a house.
And I really want a house >:(
As long as you maintain a good credit rating, or you simply save up enough to buy one, it'll happen. The sky isn't falling.
