Sunday Financial Meltdown Blogging

Every now and again, and then increasingly as things start looking worse, I get a comment like "how can you write about [thing that's not earth-shatteringly important] when the economy is [something terrible happening in the economy]." The twofold answer is, of course, that nobody can write exclusively about the most objectively important things all the time and secondarily that I try to focus write blog posts that I think are going to be good posts rather than just posts on objectively important topics. I don't, in general, have any opinions about the problems in the financial markets that go beyond the utterly obvious -- bad things seem to be afoot and I'm worried.

If you want non-stop coverage of the financial crisis from a center-left perspective, I'd recommend Delong and Krugman; from a more libertarian perspective there's Marginal Revolution and The Atlantic's own team of Megan McArdle and Clive Crook.

But speaking strictly as an ideologue, I don't necessarily have a problem with the government intervening to bail a bunch of rich guys out when their own bad decisions blow up in their faces if that's what's needed for the health of the overall economy, but this sort of thing is one of several reasons why I think the very rich should pay high tax rates and we shouldn't be happy about the prospect of ever-growing inequality. At a certain level, the game is rigged and you're not really bearing any risk.

UPDATE: Also the widely recommended Calculated Risk. Don't take the remarks here as intended to disparage the quality of analysis offered elsewhere. There are a lot of good economics blogs out there -- along with legal issues it's one of the best-covered issue niches of the blogosphere.

Comments

intervening to bail a bunch of rich guys out [link to atrios] when their own bad decisions blow up in their faces if that's what's needed for the health of the overall economy, but this sort of thing is one of several reasons why I think the very rich should pay high tax rates and we shouldn't be happy about the prospect of ever-growing inequality. At a certain level, the game is rigged and you're not really bearing any risk.

Posted by Page Source viewer | March 16, 2008 6:00 PM

McMegan is a blot on the name of Chicago's GSB.

The best person to look at, Matt, is Barry Ritholtz, by a long shot, and then probably Calculated Risk and a few others.

Posted by Greg | March 16, 2008 6:07 PM

You know how you destroy Megan when she writes about something you have studied and thoughtfully considered because she is clearly both factually wrong and logically incorrect? Well, when she writes about economics it is about the same quality.

Posted by mickslam | March 16, 2008 6:11 PM

Calculated Risk, Naked Capitalism, bondad are some others.

Now as for its significance in your postings, well, this is the "drowning the government in the bathtub" scenario. The bailout on the fiscal side is either Social Security or higher taxes on the rich. Think the chaos in Iraq or here is just incompetence? See the beneficiaries and see how they benefit from the total lack of coherence. Think that qualifies as fodder for a good post or two...

Posted by Wilson | March 16, 2008 6:11 PM

Also, Calculated Risk.

Posted by MattF | March 16, 2008 6:12 PM

Uh, I think you might want to redo this post so it makes a bit of sense.

I'm not quite sure why, as an ideologue, you are for spreading moral hazard throughout the system. It would be nice to know - is the ideology in question here Leninist? Is it that you think the capitalists need rope to hang themselves, thus allowing a rightwing government to socialize the losses of the wealthy in order to so anger the masses that they will rise up and overthrow our current order? Is that it? Or are you saying that taxes will somehow have a magical effect on the combo of wage stagnation and Federally pumped up inflation that will be good for people, helping them put off those wasteful visits to the dentist for the kids and the like so that they can work and save and do what is really necessary, as a permanent strata of serfs?

Hard to tell where you are coming down on the communist/feudal scale here, Matt.

Posted by roger | March 16, 2008 6:14 PM

Excellent point Matt. I know that sometimes I get frustrated when I rush to one of my favorite blogs (you, Andrew, Greenwald, etc.) only to discover a post on the Rockets, some obscure video or some other personal favorite. I have to remind myself that despite the importance of the presidential primary and subsequent election, it is good to step back and gain some perspective in life.

Keep it up!

Posted by Michael Fisher | March 16, 2008 6:16 PM

Everyone keeps mentioning Calculated Risk. It gets 5 times as many hits per day as Krugman. Hell, Krugman reads Calculated Risk to stay on top. It and Big Picture are the two most widely read economics blogs right now by a long shot. Mankiw gets a fifth of their traffic. See Gongol for the rankings.

McMegan's economic commentary is worthless. She posts nothing but "me-too" comments about this story and has been consistently behind the curve. The whole Bear Stearns thing caught her with her pants down when everyone competent has been predicating this for months. When she does actually stick her neck out, the big financial blogs rip her apart.

The reason why we complain about you ignoring the economy is not because we are expecting Wall Street level financial analysis from you. It is because you do seem to be making your living as a political commentator. Given that the economy is very likely to be the deciding issue in the coming election, it might behoove you to figure out something to say.

Posted by Walker | March 16, 2008 6:21 PM

"from a more libertarian perspective there's Marginal Revolution and The Atlantic's own team of Megan McArdle and Clive Crook."

I don't know Clive Crook so I won't comment; charitably speaking, McArdle is a dope. She has been saying the economic crisis is not a crisis for so long it is hard to know what to make of her "analysis". Since when does "denial" qualify as "intelligent analysis"?

Posted by della Rovere | March 16, 2008 6:27 PM

To add your post , Walter, I find myself always asking the question:
Considering everything we've said is true, why does Megan McArdle still have her job?

Posted by Greg | March 16, 2008 6:29 PM

Considering everything we've said is true, why does Megan McArdle still have her job?

Because people do read her. In journalism, you do not need to be competent. Just read.

Posted by Walker | March 16, 2008 6:35 PM

Mark Thoma's Economists View is not only an excellent blog in itself, but in the right column has all the resources/links(papers, newspapers)/bloglists anyone could possibly desire.

As the economy worsens and after Obama's has the nomination in hand, Matt could perhaps usefully examine and critique Obama's economic policies in order to ensure that upon inauguration Obama has a progressive redistributionis tailwind.

Being positive & optimistic here.

Posted by bob mcmanus | March 16, 2008 6:37 PM

On the financial crisis, I'd recommend:

Willem Buiter, LSE economist and former Bank of England monetary policy committee member:
http://blogs.ft.com/maverecon/

And Wolfgang Munchau, FT columnist and blogger:
http://www.eurointelligence.com/Munchau-s-Euro-Blog.698.0.html

Posted by otto | March 16, 2008 6:47 PM

Considering everything we've said is true, why does Megan McArdle still have her job?

Megan is not an expert one goes to for insight. Megan is a brand used to promote the ideology she writes in favor of.

There's a great line from an entry in Stuff White People Like that says, "The reason white people love architecture so much is that deep down they believe that they could have been a great architect." Similarly, deep down, secular conservatives believe that they could have been a great economist. Megan both epitomizes and appeals to that very demographic, and that's why she as a job, because she can attract that audience in droves. She's a more articulate and charismatic version of them, yet not an actual expert who might alienate that constituency by writing with too much complexity or holding opinions, based on data, that run contrary to the secular Republican party line.

Posted by Tyro | March 16, 2008 6:50 PM

If a bailout is necessary for some institution that is "too big to fail", it should be treated like a Chapter 11 reorganization. You save the organization, and the stockholders basically lose their investment. The point is that someone has to pay a price for screwing up, or we'll just keep encouraging irresponsible behavior.

Also, I think that the taxpayers should be compensated somehow when taxpayer money is used to fund a bailout, so that the money gets paid back to the Treasury when the institution gets back on its feet.

Posted by Joe Buck | March 16, 2008 7:21 PM

...and just before the 7:30pm bell (asian markets open then) JPMC buys Bear for $2 per share bringing Bear's value to approx. $236M. At close of business Friday, Bear's value was $3.5B. Wow-eee.

Posted by Robert Paulson | March 16, 2008 7:23 PM

Jesus Christ, how much do they pay you to constantly promote Megan McArdle? Here's an analogy you'll understand: Megan McArdle is to economics as Michael O'Hanlon is to Iraq.

Posted by mq | March 16, 2008 7:32 PM

Points taken.

Nice post. Grown-up too.

Posted by Marv Albert | March 16, 2008 7:40 PM

Since this is an economic thread, I would just like to say...

JPM is buying Bear Stearns for $2 a share. That is about as close as you can get to bankrupt without actually being bankrupt.

Hope everyone has their money safe and secure. Anyone with an account in WAMU should start looking at other options.

Posted by Walker | March 16, 2008 7:41 PM

"You save the organization, and the stockholders basically lose their investment. The point is that someone has to pay a price for screwing up, or we'll just keep encouraging irresponsible behavior."

See Robert Paulson's post; that's essentially what has happened. The largest single investor in Bear Stearns, Joe Lewis, bought most of his 7% or 8% stake in Bear at about $100. He just lost 98% of his investment.

Nice catch, Paulson. From the FT: "JPMorgan buys Bear Stearns for $2 a share":

JPMorgan Chase on Sunday night agreed to buy Bear Stearns, the stricken US investment bank, for around $230m in shares in a deal that puts an end to Bear’s 85 years of independence and highlights the serious risks faced by banks during the credit crunch.

JPMorgan’s cut-price takeover of Bear, which has the backing of the Federal Reserve and the Treasury, was agreed before the opening of Asian markets on Monday morning in an attempt to stave off a run on other banks.

However, the deal, which values Bear at just $2 per share, compared with the $169 hit in January last year and the $30 reached on Friday, will wipe out the value of the investments of Bear’s shareholders including some of its senior management.

Posted by Fred | March 16, 2008 7:42 PM

"intervening to bail a bunch of rich guys out when their own bad decisions blow up in their faces" should be coupled with severe penalties for the rich guys.

Yves Smith from Naked Capitalism puts it well:

"Yesterday, David Wessel in the Wall Street Journal also discussed options for shoring up banks, including nationalization (mind you, to be limited to ones truly too large to fail). Of the many suboptimal solutions, I find that less offensive than others, provided the existing shareholders are wiped out and management is put on lean salaries (they can get performance bonuses, but not overly lavish ones. Frankly, they should be grateful they are not going to jail or having their previous comp clawed back, and if they could be given that stick along with a bit of carrot, they might go along."

http://www.nakedcapitalism.com/2008/03/how-will-washington-finesse-bailout.html

Posted by Ivan | March 16, 2008 8:01 PM

secular conservatives believe that they could have been a great economist. Megan both epitomizes and appeals to that very demographic, and that's why she as a job, because she can attract that audience in droves.

That's a good insight, and it dovetails with today's posts about The Economist. The people who think McMegan is insightful also read that magazine for its 'insights'; that she was hired by them makes complete sense.

Posted by pseudonymous in nc | March 16, 2008 8:02 PM

"Yves Smith from Naked Capitalism puts it well"

Similar sentiments from the editors of the WSJ ("Bear Essentials"). Excerpt:

These columns prefer the discipline of the market, but then we don't know all of the facts that regulators confronted as they looked at Bear's troubles. Specifically, we don't know if letting Bear collapse might have had a domino effect on others in the debt and derivative markets.


The Fed and J.P. Morgan are acting in concert to give Bear short-term access to the Fed's discount lending window that Bear couldn't access on its own. A big plunger in the debt markets but not a standard commercial bank, Bear's private sources of funds had dried up. The overriding public interest at the current moment is to maintain a functioning financial system, and regulators clearly felt this was at risk from a Bear failure. Just once we'd like to see what would happen if a big bank did fail, but the current general market panic arguably isn't the best time to have that experiment. Presumably Bear will now be shopped to private buyers.


On the other hand, the financial system also can't function properly if every institution believes it is "too big to fail." That's an invitation for everyone to behave the way Bear Stearns did in the mortgage securities market. This means that if taxpayer funds are going to be used to rescue Bear, then Bear's private actors need to accept their own form of discipline.


This includes Bear's equity owners, who deserve to endure major losses, if not lose their entire stake, in any sale. The discipline should also apply to Bear managers who got the bank into this mess. They should be fired, without bonuses and golden parachutes to the extent that is contractually possible. If bankers believe they can make bad investments and still emerge with enough cash to buy another beach house, the financial system will never have enough discipline.

Posted by Fred | March 16, 2008 8:22 PM

I second all the McMegan snark. Youth and inexperience do not excuse her or you. She is in fact more or less an economic illiterate, and "libertarian economics" is more or less at home on the immortal Carlin's list of oxymorons.

Check out McMegan's actual training: she has a B-school degree. That is to actual economics understanding much less than the unhappy connection of most MDs to actual biology. As a friend of mine who is a B-school dean put it, "we're trying to unload our economics department." The aims of the two educations are wholly different. McMegan is waste of bytes.

Posted by Tom Levenson | March 16, 2008 8:23 PM

"but this sort of thing is one of several reasons why I think the very rich should pay high tax rates and we shouldn't be happy about the prospect of ever-growing inequality. At a certain level, the game is rigged and you're not really bearing any risk."

Yes, I'm sure all those rich Bear Stearns shareholders are very happy with their $2 a share bailout.

Posted by bearstearns | March 16, 2008 8:30 PM

"Check out McMegan's actual training: she has a B-school degree."

To be fair, she has an MBA from the b-school at the U. of Chicago, which is known for its economic rigor (and for being the home of the secular messiah's chief economic adviser/diplomatic liaison to Canada, Austan Goolsbee). That did lead to an unfortunate series of posts by her on the efficient market theory though, where she denied all evidence that refutes the theory.

Nevertheless, that gives Megan a stronger credential to blog about economics than an undergrad philosophy degree from Harvard gives Matt to blog about anything other than philosophy.

Posted by Fred | March 16, 2008 8:43 PM

Well Bob McM covered Economist's View which came from nowhere (okay Eugene Ore) to become an internationally read Econ site in astonishingly short time largely becauseMark lets posters from outside the academy establish a voice even if he does not entirely agree. Prof Thoma is the farthest thing from a bomb thrower but he is willing to admit that bomb throwers like me and Bob who will keep the discourse on a civil level deserve a forum.

But if you want to get a more unabashed progressive approach complete with reactionary opposition it doesn't get more akin to a bar fight than Angry Bear. For a little more left but more elevated forum you would want to add the designated successor to MaxSpeak, namely EconoSpeak.

Posted by Bruce Webb | March 16, 2008 9:01 PM

For what it's worth the reason I love architecture is that I'm quite sure I could never do it. Which may also be true of economics, but there I'm not so sure that the ones doing are actually doing anything. Other than mathematical modeling, and repeating Ricardo, of course.

Posted by Gene O'Grady | March 16, 2008 9:03 PM

How can you mention those other economics blogs and not mention Angry Bear?

Bastard.

Posted by godoggo | March 16, 2008 9:33 PM

Exactly what sort of "bailout" involves a bunch of rich guys losing 97.5% of their investment. JP Morgan Chase just bought Bear Sterns (as had been predicted by a number of us) at a shockingly low price. The "bunch of rich guys" (including the CEO whose stock options are not worth diddly squat) lost almost everything, while the Fed will get is loan paid back in full. Will that finally satisfy the "Death to all bankers!" clique, or do you really want that guillotine at the NYSE?

Posted by Jonf | March 16, 2008 9:54 PM

JonF, tell us, how many shares do you think the CEO had? In December he sold $15.4 million worth and maintained 5.6 million shares (see cached article).

Given that circus folk don't ever see $15 million dollars ever, and given that his stake is still worth another $11 million, I'm afraid I can't feel sorry for someone with a net worth of at least $25 million.

Posted by Circus Freak | March 16, 2008 10:05 PM

The Fed's never getting that money back, Jonf.

This seems to be a lot more like a bailout of JPM, who was the most exposed of BSC's counterparties.

Posted by Greg | March 16, 2008 10:06 PM

JonF-
Yes the Bear Sterns stockholders will lose practically everything (if the deal goes through as is).

But per "while the Fed will get is loan paid back in full".

I certainly hope so. And it probably will happen. But JP Morgan's case to its own shareholders plays up the fact that 30 billion of the total exposure (and 20 billion of the mortgage exposure) is in that fed vehicle and so is 'off the books' and can be neglected to determine whether this is a good idea from JP Morgan's POV.

So at the very least it seems that JP Morgan does not care whether or not it pays back the Fed loan, and more uncharitably is counting on not paying it back.

Posted by Kolohe | March 16, 2008 10:22 PM

Re JohF's comment "Will that finally satisfy the "Death to all bankers!" clique, or do you really want that guillotine at the NYSE"
---------

Someday people are going to wake up and realize just how badly corrupt whores like George W Bush and Republicans Newt Gingrich, Tom Delay,etc have screwed them.

I suspect the real reason Homeland Security was created was to ensure that Republican leaders don't have their fucking heads chopped off and mounted on stakes at the National Mall.

I myself would never advocate such a thing of course.

Posted by Don Williams | March 16, 2008 10:28 PM

Well, given what I vaguely remember of the "outsize" compensation of the senior Bear executives in recent years, I wouldn't be surprised if (say) the top dozen cashed out a total of a billion dollars or so between them over the last few years (cash bonuses plus stock sales). So I'd have to say that their "business strategy" worked out pretty well for them, though less well for all the mutual funds and such holding Bear stock, and also the US Treasury.

The mitigating factor is that I'd suspect much of that money ended up in various hedge-fund type investments, many of which will end up proving worthless for mostly the same sort of reasons.

It's a little like all those stories you read of African dictators stealing hundreds of millions of their countries, but eventually dying broke, since their own subordinates later stole them blind...

I also wouldn't be surprised if the market value of really high-end NYC coops drops about 70% over the next year or two.

Posted by RKU | March 16, 2008 10:32 PM

I would like, however, for Democratic leaders to point out in the coming months that our collapsing economy is DIRECTLY tied to past Republican Congresses and George Bush -- who were so caught up in their "free market" bullshit that they failed to regulate the hedge funds, derivatives trading and other forms of Wall Street greed that is now coming home to roost.

Posted by Don Williams | March 16, 2008 10:34 PM

Fred sees my snark and raises me one Chicago school, (and sideswipes Matt neatly along the way -- good one!).

The point is not whether she has a qualification to blog -- if I can do it, my cat is qualified (the lack of opposable thumbs is a problem, but he does know his way around a keyboard).

But the question is whether the return on reading her work is worth the time invested in the task. And there the answer seems to me pretty clear. She can't do the analysis to compete with the real economics blogs -- start with Delong and move through all kinds of folks with all kinds of political tropisms -- nor does she have a whole lot of empirical experience to inform her highly targeted, fancy trade school training.

Put the analogy another way -- I wouldn't want to fly in a plane designed by someone just out of flight mechanics school, and nor would I wish to fly in one fixed by an aeronautics engineer. Megan falls into even less impressive category, for she is the mechanic who never turned a wrench.

Posted by Tom Levenson | March 16, 2008 10:45 PM

Fred sees my snark and raises me one Chicago school, (and sideswipes Matt neatly along the way -- good one!).

The point is not whether she has a qualification to blog -- if I can do it, my cat is qualified (the lack of opposable thumbs is a problem, but he does know his way around a keyboard).

But the question is whether the return on reading her work is worth the time invested in the task. And there the answer seems to me to be pretty clear. She can't do the analysis to compete with the real economics blogs -- start with Delong and move through all kinds of folks with all kinds of political tropisms -- nor does she have a whole lot of empirical experience to inform her highly targeted, fancy trade school training.

Put the analogy another way -- I wouldn't want to fly in a plane designed by someone just out of flight mechanics school, and nor would I wish to fly in one fixed by an aeronautics engineer. Megan falls into an even less impressive category, for she is the mechanic who never turned a wrench.

Matt seems like a nice guy -- and the Atlantic bloggers appear to have a non-aggression pact. So I suppose one can read mere collegial harmony in the plug above. But the difference in the quality of argument from one blog to the next on this site is pretty amazing.

Posted by Tom Levenson | March 16, 2008 10:48 PM

To offer balance to the mean comments about Jane Galt, let me point out - without defending her except as I would any other woman who's honor was being besmirched - that when MattY speaks about immigration matters he shows just how far a philosophy degree plus life experience that as far as I can see consists simply of summering in Maine will get you. Not very far at all.

And, just like MattY, DeLong shows how little he knows when he discusses that same issue. The only difference is he deleted a few comments where I pointed out how much of an idiot he is.

As for Marginal Revolution, Tabarrok is even worse, having put together an open letter on the topic that used imprecise language in an apparent attempt to deceive and that promoted something while completely failing to disclose all the costs of the issue. Some economist.

Posted by TLB | March 16, 2008 10:54 PM

To be fair, she has an MBA from the b-school at the U. of Chicago, which is known for its economic rigor

Of the professors -- not the students. B-schools often have excellent econ departments (e.g. Stanford), but the training is not designed to produce economists. MBAs have a significantly worse economics training than undergrad econ majors do.

McMegan also appears to be a pretty mediocre example of even MBA students. She regularly makes mistakes that would get points off in an intro econ course.

Posted by mq | March 16, 2008 11:06 PM

I'm sorry, I can't get over the notion that being left with only $11 million in stock value is almost exactly the same thing as capital punishment.

Who else thinks (TLB is, obviously, exempt from any question involving thinking) that being left with millions more than most people will see in their entire lives is one step from being publicly executed?

Posted by Circus Freak | March 16, 2008 11:18 PM

Quoted:

"A few questions come to mind immediately. First, is it possible that it would be better for the economy if the Fed allowed the banks to fail and provided an opportunity for the stronger players to sweep in and acquire the failing banks? Second, is the economy served, or only further damaged by using the Federal Reserve to prop up failing financial institutions?

I do not have a particular opinion about these issues, but they seem questions worth asking."

Posted by Aaron | March 16, 2008 11:23 PM

mq, as an Econ major at the University of Chicago, let me add that my professors are uniformly disparaging of the people at our GSB.

One prof described them as "good talkers, but once you get beyond that, there's not too much substance to them."

Posted by Greg | March 16, 2008 11:23 PM

Glad to see "McMegan is a jackass" has been well covered.

Matt, I dig you, baby, and she seems nice enough, but you should know better.

Posted by Sifu Tweety | March 17, 2008 1:17 AM

I've been telling all my people to buy SKF (the inverse financial sector ETF) since last Spring - it was around 70 then - was in the 90s at Thanksgiving time and is 140 now - if you think that this only the only shoe to drop, might as well make some money off of it...

Posted by Ethel-To-Tilly | March 17, 2008 2:17 AM

whoops - if you think that this is NOT the only shoe that will drop, might as well make some money off of it....

Posted by Ethel-To-Tilly | March 17, 2008 2:19 AM

Ethel-To-Tilly,

BSC was levered 30-to-1 and heavily exposed to mortgage-backed securities. That's not the case with every financial stock, though I wouldn't be surprised to see them all lose some more market cap Monday. I was going to suggest shorting individual financials instead of buying SKF, but I guess it depends whether you think BSC is one of a few bad apples or the whole sector is full of bad apples with one or two exceptions. If you think the sector is mostly bad apples, then a strategy to increase your returns and hedge your risks might be to buy SKF and then also go long in what you consider to be the good apples.

Posted by Fred | March 17, 2008 2:54 AM

But the difference in the quality of argument from one blog to the next on this site is pretty amazing.

My personal impressions:

Yglesias-flashes of promise (though infrequent), but too greatly influenced by the opinions of liars (Krugman) or dunces (Ezra Klein). Seems to not have ever dealt with a real, live, government agency from either the employee or the user end. Arguments sometimes come in the following form:

Step 1. Plan New Railroad,
Step 2. ?,
Step 3. Utopia!

reminding me of the Underpants Gnome Theory of Economics.

McCardle-good arguer. Nice prose. Sounds reasonably correct until you unpack an argument and realize she left a 'p', 'q', or 'p implies q' locked in her trunk, along with her wallet, her left contact lens and the keys to said trunk.

Ambinder-likely a room full of computers, rather than an actual person. No human being can possibly sort the amount of data these mainframes do, particularly when the assigned task is as boring and frustrating as the collation of primary campaign press releases regarding the latest meta-poll or non-scandal. Collectively, they are good source of information if you like that sort of stuff, which I don't.

Douthat-Less prolific than the others, but very thoughtful. Unfortunately, he almost seems to be a European-style "Christian Democrat," which really irritates me.

Fallows-not always sure how he selects what to post about or what the relevence is meant to be, but I don't know if that's his fault or mine.

Crook-???

Sullivan-probably the best of the bunch. Is, however, somewhat hampered by a weird combination of oversensitivity to criticism and an obsession with foreskin removal. I find the latter both confusing and frightening.

Posted by Shinyk | March 17, 2008 4:27 AM

I just want to parrot the sentiment: no Angry Bear? Matt, what is up?

Posted by freddiemac | March 17, 2008 10:55 AM

from wikipedia's Glass-Steagall entry:

"On November 12, 1999, President Bill Clinton signed into law the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act of 1933. One of the effects of the repeal is it allowed commercial & investment banks to consolidate.[citation needed] Economist Robert Kuttner has criticized the repeal of the Glass-Steagall Act as contributing to the 2007 subprime mortgage financial crisis [1]."

Thanks Bill, i.e. Hillary's "experience." And Hillary voted for the draconian Bankruptcy Bill which will no doubt make life more difficult for working women everywhere.

Posted by Peter K. | March 17, 2008 12:34 PM

Profits get privatized; losses get socialized.

Median income hasn't risen since 2000. With the widening income inequality in the US since 2000, I think it is fair to say that all of the profits went to the wealthiest private individuals.

Perhaps the most important reason for progressive taxation and government regulation (translation: bigger government than what anarcho-liberos dream of).

Posted by PJ | March 17, 2008 4:27 PM