The House of Representatives voted down the proposed bailout today. This I approve! There was substantial opposition to the bill among just about everybody I know, and it’s good to see politicians obeying the will of the people every once in a while.
I can’t rule out the possibility that a bailout of some kind is necessary. I am not an economist; I am not up on the macroeconomic knowledge I’d need to have an opinion on the issue worthy of stating. My opposition to the bill had a lot more to do with the sense that politicians were trying to pull a fast one, and the fact that money allocated cannot be unspent, than any rational economic theory that it is better to let the market weather through it on its own.
The problem is that I don’t know any economists personally. I haven’t read any articles by economists for or against the bailout plan. I’ve heard a whole lot from politicians, who can’t be trusted to give an objective reading of the situation, and a lot from news organizations and bloggers commenting on what the politicians have to say.
A declining market hurts my net worth. The fact of the matter is that I’ve got ten times as much money in the stock market as in day-to-day bank accounts, and I’ve got the automatic transactions set up to channel a fraction of every month’s income into the market for retirement. The thing is, I can afford to wait this out. I don’t have much debt right now, and I’ve got no incentive to seek any in the short term. If it takes a decade or two for everything to recover, I’ll be annoyed at the enforced delay in recovering those assets, but it won’t affect my standard of living.
I’d love to see a well-reasoned, lucid explanation by a qualified economist showing how a bailout would help me. If such a thing were produced, I could see myself being persuaded that a bailout is the right course of action for the government. I suspect that this is true of a lot of people.
However, the absense of any such thing implies that it does not exist because qualified economists don’t believe the bailout will help the average American. Alternately, they do believe that it would, but they won’t waste the time writing a position paper on legislation that’s being pushed through an extreme fast track. They’re talking about writing and voting on an alternate bailout plan as soon as this Thursday. Without time to read and think through proposed legislation, how can it help but become a political process?
The problem with processes which are inherently political is that they are bad at predicting the worth of any given piece of proposed legislation. To get a realistic assessment, you need to go to subject matter experts. Nobody else’s opinion is worth much of anything.
In this case, I’m waiting to hear back from the economists.
