A helpful article

[blehmeh05]

If you're like me and interested/concerned about all the financial bailout news that's been dominating the headlines, but having trouble understanding just why things are so dire (and feeling less than trusting of politicians who want us to take their word on it), this article from the Herald Tribune may shed some light. One of the more cogent,

Comments

[scribblemoose]

That is a very helpful article, and applies to the UK too, on a lesser scale, so thanks for the link. I'll pass it on to our Economics teacher, in fact, because he's been having trouble getting his students to understand this

[blehmeh05]

However, there's one thing it misses out, which is the main reason behind the loss of confidence by creditors - the fact that as well as relying on credit, our global economy depends on the principle of unlimited economic growth.

*nods* Whenever I hear people championing the 'free market' I always wonder if they realize all the economic models they cling to are based on multiple assumptions like this one that just don't hold up under real-world circumstances. I'm a big believer in using simplifications and assumptions as tools to promote progress in research, but I wish more people understood that the purity of free market capitalism only exists on paper.

[bleedtoblue]

Thanks! I had a long (and quite coherent) lecture/explanation from a friend in banking today about the bailout and WHY IT IS A GOOD THING. I hope so, since it seems we will be having it.

[blehmeh05]

I'll admit I really don't know enough about economics to have any clue about how effective the bailout will be (it seems like even its authors aren't 100% sure on that one), but it does seem pretty clear that something did need to be done.