04 October 2008

Absolution

Any last hopes that the latest government financial bailout would stave off the economic downturn and cheer investors was put to rest when the stock markets tanked immediately after the bill was signed into law. This bailout can't possibly succeed, and will fail just as all the others have over the last year, but that hardly matters. The real goal of this bailout is to absolve the government of responsibility for the real troubles that lie ahead, and at this it succeeds in spades.

Had the policy makers not enacted a major intervention then they would have nothing to say for themselves months from now, as the economy continues to crumble and increasing masses of people lose their jobs. Instead, the nation's leaders have now absolved themselves of any responsibility for the disaster in the offing. When the Dow is below 8000, and home prices have dropped another 30% the US leadership can say, with a straight face, that they did their best to stop it. After all, the government spent $800 billion of tax-payer money in a valiant effort to stop the bleeding. Is it their fault that the bailout didn't work?

To be fair, I am sure that many policy makers actually doing what they thought would help, but for many others the cover this legislation gives them is well worth the tax-payer money they are spending, and more.

Of course, its not as if the government can do anything to stop the depression, but that won't stop the world's leaders from spending as much of their fellow-citizen's money as they can to make it look like they are trying.

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