Comments on: Economists Back Government Moves http://welkerswikinomics.com/blog/2008/09/20/httpblogswsjcomeconomics20080919economists-back-government-movestrackback/ for students and teachers of Economics Thu, 09 Feb 2012 09:13:55 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Becca Poole http://welkerswikinomics.com/blog/2008/09/20/httpblogswsjcomeconomics20080919economists-back-government-movestrackback/comment-page-1/#comment-6112 Becca Poole Sat, 11 Oct 2008 07:52:02 +0000 http://welkerswikinomics.com/blog/?p=571#comment-6112 I am glad that your post included pictures of Paulson and Bernanke, Mr. Latter. You always talk about them in class, and now I can picture them! I feel that one of the major problems with the Fed and the government stepping in is that they are not effectively telling the public what the public should do to hopefully get out of this crisis and advoid an even biffer one. As Tyler mentioned in his post, it is very disheartening to know how uninformed the American population is. However, I do not believe it is entirely the American populaltion fault. As you have mentioned, Mr Latter, the media is definetly spinning a negative view of the economy and the economic plan. However, companies, who have just been "bailed out", (AIG) should not be spending money for "planning" retreats when they are being under much scrunity. If I was in the government, I would definitely consider getting the money back, or make sure that they are getting the message that they are making everyone look bad. I believe along with Cat, Sam, Tyler, and Alec that Americans should support the Bailout Plan, since many economists have faith in this plan. Although, it is quite scary on how no one knows whether or not this is going to work. I guess we'll have a great deal more talks about this bailout plan and see if it works or not! I am also worried that this is happening world-wide. Our economies are all interdependent on one another, so hopefully we can all survive and get out of this crisis. I believe that this financial crisis is more concerning that this is occurring internationally, but hopefully if one country can find a solution, hopefully it can help recover all the other countries' economies! I am glad that your post included pictures of Paulson and Bernanke, Mr. Latter. You always talk about them in class, and now I can picture them! I feel that one of the major problems with the Fed and the government stepping in is that they are not effectively telling the public what the public should do to hopefully get out of this crisis and advoid an even biffer one. As Tyler mentioned in his post, it is very disheartening to know how uninformed the American population is. However, I do not believe it is entirely the American populaltion fault. As you have mentioned, Mr Latter, the media is definetly spinning a negative view of the economy and the economic plan. However, companies, who have just been "bailed out", (AIG) should not be spending money for "planning" retreats when they are being under much scrunity. If I was in the government, I would definitely consider getting the money back, or make sure that they are getting the message that they are making everyone look bad.

I believe along with Cat, Sam, Tyler, and Alec that Americans should support the Bailout Plan, since many economists have faith in this plan. Although, it is quite scary on how no one knows whether or not this is going to work. I guess we'll have a great deal more talks about this bailout plan and see if it works or not! I am also worried that this is happening world-wide. Our economies are all interdependent on one another, so hopefully we can all survive and get out of this crisis. I believe that this financial crisis is more concerning that this is occurring internationally, but hopefully if one country can find a solution, hopefully it can help recover all the other countries' economies!

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]]> By: Alec Kormanec http://welkerswikinomics.com/blog/2008/09/20/httpblogswsjcomeconomics20080919economists-back-government-movestrackback/comment-page-1/#comment-6084 Alec Kormanec Fri, 10 Oct 2008 10:18:25 +0000 http://welkerswikinomics.com/blog/?p=571#comment-6084 So the government passed this bailout bill and the economy and stocks seem to keep going in the negative direction. I know that it would take time for them to implement this bill but how much time do they need to finally get the bill working at full potential. You said in class that in the bill they would by up all the faulty assets at there depreciated values and give the companies more money but how do we know that the government will take those depreciated assets and go after all the late loan payments they have just bought up. And if they do not get all the money in return from the faulty loans, how willl the government get its money back to balance out at zero. Another question that i have is related to sports. I am a big golfer and enjoy sports a lot. For the most part most sporting events are made possible by the sponsorships from large companies. An example would be AIG which is a very large sponsor for the PGA and many soccer clubs throughout Europe. Since many of these big businesses are going out of business, how will it effect the sporting world? Will there be less sponsors sponsoring sporting events or would the price of entrance tickets go up if they did not get as many sponsors. So if the government bails ouut these companies, will there be an effect on the sporting world? So the government passed this bailout bill and the economy and stocks seem to keep going in the negative direction. I know that it would take time for them to implement this bill but how much time do they need to finally get the bill working at full potential. You said in class that in the bill they would by up all the faulty assets at there depreciated values and give the companies more money but how do we know that the government will take those depreciated assets and go after all the late loan payments they have just bought up. And if they do not get all the money in return from the faulty loans, how willl the government get its money back to balance out at zero.

Another question that i have is related to sports. I am a big golfer and enjoy sports a lot. For the most part most sporting events are made possible by the sponsorships from large companies. An example would be AIG which is a very large sponsor for the PGA and many soccer clubs throughout Europe. Since many of these big businesses are going out of business, how will it effect the sporting world? Will there be less sponsors sponsoring sporting events or would the price of entrance tickets go up if they did not get as many sponsors. So if the government bails ouut these companies, will there be an effect on the sporting world?

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]]> By: Tyler Meintel http://welkerswikinomics.com/blog/2008/09/20/httpblogswsjcomeconomics20080919economists-back-government-movestrackback/comment-page-1/#comment-6083 Tyler Meintel Fri, 10 Oct 2008 10:17:55 +0000 http://welkerswikinomics.com/blog/?p=571#comment-6083 This post is honestly quite interesting. Many average americans who are not educated in an economics background are questioning the government's moves of bailing out AIG and other companies while spending so much to do it. I find it really interesting that other economists that are respected are agreeing with what the government is doing. My questions are how can the american public be so uninformed? If all of these respected economists are saying that the 700 billion dollar bailout plan is right, that it is needed, or even that it might not be enough then why is the american public questioning the governments moves to save the economy? Shouldn't they be happy that the government is trying to save their loans and stocks? I think that if these economists are happy with what the government is doinf then so should we. This post is honestly quite interesting. Many average americans who are not educated in an economics background are questioning the government's moves of bailing out AIG and other companies while spending so much to do it. I find it really interesting that other economists that are respected are agreeing with what the government is doing.

My questions are how can the american public be so uninformed? If all of these respected economists are saying that the 700 billion dollar bailout plan is right, that it is needed, or even that it might not be enough then why is the american public questioning the governments moves to save the economy? Shouldn't they be happy that the government is trying to save their loans and stocks? I think that if these economists are happy with what the government is doinf then so should we.

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]]> By: Sam F http://welkerswikinomics.com/blog/2008/09/20/httpblogswsjcomeconomics20080919economists-back-government-movestrackback/comment-page-1/#comment-6082 Sam F Fri, 10 Oct 2008 09:56:11 +0000 http://welkerswikinomics.com/blog/?p=571#comment-6082 I don't really understand what's happening in our economy. But in my defense things are changing so fast that who can keep track of it all? Anyways recently the government has been deciding on whether to put the seven hundred billion into the economy, and they have finally decided too; but when do they actually plan to inject the money into the economy. It might be to late to save the economy from a depression if they keep holding out on us. Germany has recently put forty nine billion into their economy and that apparently is only enough to delay the impending doom. Even though I have just criticized the government I agree with Tyler Cowen when he says that Paulson and other have been making good decisions in this difficult time. Thought I think that they are taking too long with spending the money. And to tie politics into this I want to know what Obama and McCain are going to do about this. Obama has been saying for some while that the crisis started years ago. Which may not be entirely true though I remember some friends in my freshman year saying their parents, who were restate agents, were having a though time selling houses. But until recently McCain has been saying that our economy has been pulling through; though compared to many other countries that’s an over statement. So I want to know will the seven hundred billion dollars be enough to save our economy? Will Paulson continue with leading the defense against the economic troubles? If he doesn’t then will the next person in charge continue with his plan or mess it up even more? And how will the government deal with the toxic assets? I don't really understand what's happening in our economy. But in my defense things are changing so fast that who can keep track of it all? Anyways recently the government has been deciding on whether to put the seven hundred billion into the economy, and they have finally decided too; but when do they actually plan to inject the money into the economy. It might be to late to save the economy from a depression if they keep holding out on us. Germany has recently put forty nine billion into their economy and that apparently is only enough to delay the impending doom.

Even though I have just criticized the government I agree with Tyler Cowen when he says that Paulson and other have been making good decisions in this difficult time. Thought I think that they are taking too long with spending the money.

And to tie politics into this I want to know what Obama and McCain are going to do about this. Obama has been saying for some while that the crisis started years ago. Which may not be entirely true though I remember some friends in my freshman year saying their parents, who were restate agents, were having a though time selling houses. But until recently McCain has been saying that our economy has been pulling through; though compared to many other countries that’s an over statement.

So I want to know will the seven hundred billion dollars be enough to save our economy? Will Paulson continue with leading the defense against the economic troubles? If he doesn’t then will the next person in charge continue with his plan or mess it up even more? And how will the government deal with the toxic assets?

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]]> By: Steve Latter http://welkerswikinomics.com/blog/2008/09/20/httpblogswsjcomeconomics20080919economists-back-government-movestrackback/comment-page-1/#comment-6057 Steve Latter Thu, 09 Oct 2008 06:21:08 +0000 http://welkerswikinomics.com/blog/?p=571#comment-6057 Hi Cat, I see in your future that you will be an economic writer for the WSJ! Your question at the end about why did the G bail out AIG but not Lehman is a good question and one that many have asked before. Perhaps the simplest answer is that AIG is a lot larger than Lehman and is more intertwined with other financial institutions and businesses. The failure of AIG was viewed as more disastrous to the economy than that of Lehman. Hi Cat,

I see in your future that you will be an economic writer for the WSJ!

Your question at the end about why did the G bail out AIG but not Lehman is a good question and one that many have asked before. Perhaps the simplest answer is that AIG is a lot larger than Lehman and is more intertwined with other financial institutions and businesses. The failure of AIG was viewed as more disastrous to the economy than that of Lehman.

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]]> By: Catherine Boardman http://welkerswikinomics.com/blog/2008/09/20/httpblogswsjcomeconomics20080919economists-back-government-movestrackback/comment-page-1/#comment-6046 Catherine Boardman Wed, 08 Oct 2008 10:08:07 +0000 http://welkerswikinomics.com/blog/?p=571#comment-6046 Just three weeks ago, the first signs of the economic crisis were becoming evident to the United States public. After the government bailout of AIG and Bear Stearns, while allowing Lehman Brothers to go bankrupt, the American people truly commenced worrying about the economy. Though some people disagree with the government bailouts, after reading the Wall Street Journal’s Blog I agree with most economists (and both presidential candidates, as they mentioned in the opening question of the debate this evening) in supporting federal intervention in the economy. According to William Poole, governmental intervention via bailouts will encourage more and more risk-taking in lending. However, I believe that America has already learned its lesson (regarding giving and receiving risky loans). Both homeowners (who were forced to declare foreclosure) and financial institutions (who were unable to garner the debts they were owed) have learned to play it safe in the economy. Though the market is incredibly unstable at the moment, I believe that federal intervention is necessary. In just the three weeks since the first major bankruptcies and bailouts were publicly announced, General Electric (GE) and Wachovia have become financially unstable, borrowing money from Warren Buffett and being bought out, respectively. In just these three weeks, the government has developed a $700 Billion Bailout Plan, which has been revised an immeasurable number of times by countless people. I support this Bailout Plan because I believe that a free market will not result in the changes required to give the economy the jump-start that it needs. Without federal lending, companies will go bankrupt, fail to meet payroll, and lay off employees, who will then fail to pay mortgages and debts, effectually creating a cycle of economic downturn that will affect the entirety of the nation. I believe that the government must become involved in the economy, which they have, in order to save ourselves and our nation from “the worst economic downturn since the Great Depression.” I only have one question: Why would the government bail out AIG, but allow Lehman Brothers to file for a bankruptcy? Just three weeks ago, the first signs of the economic crisis were becoming evident to the United States public. After the government bailout of AIG and Bear Stearns, while allowing Lehman Brothers to go bankrupt, the American people truly commenced worrying about the economy. Though some people disagree with the government bailouts, after reading the Wall Street Journal’s Blog I agree with most economists (and both presidential candidates, as they mentioned in the opening question of the debate this evening) in supporting federal intervention in the economy. According to William Poole, governmental intervention via bailouts will encourage more and more risk-taking in lending. However, I believe that America has already learned its lesson (regarding giving and receiving risky loans). Both homeowners (who were forced to declare foreclosure) and financial institutions (who were unable to garner the debts they were owed) have learned to play it safe in the economy.

Though the market is incredibly unstable at the moment, I believe that federal intervention is necessary. In just the three weeks since the first major bankruptcies and bailouts were publicly announced, General Electric (GE) and Wachovia have become financially unstable, borrowing money from Warren Buffett and being bought out, respectively. In just these three weeks, the government has developed a $700 Billion Bailout Plan, which has been revised an immeasurable number of times by countless people. I support this Bailout Plan because I believe that a free market will not result in the changes required to give the economy the jump-start that it needs. Without federal lending, companies will go bankrupt, fail to meet payroll, and lay off employees, who will then fail to pay mortgages and debts, effectually creating a cycle of economic downturn that will affect the entirety of the nation. I believe that the government must become involved in the economy, which they have, in order to save ourselves and our nation from “the worst economic downturn since the Great Depression.”

I only have one question: Why would the government bail out AIG, but allow Lehman Brothers to file for a bankruptcy?

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