Thursday, October 2, 2008

Don't Like The Product? Change The Name?

After the shock of the $700 billion bailout plan's defeat in the House of Representatives last week, the spinmeisters set to work finding politically correct language to dupe the rubes on Main Street to support it. "Economic stabilization", "rescue" -- anything to call it something other than a bailout.

Bloomberg is inching into this Orwellian transformation,

Bailout Bill Sent Back to House After Senate Passage (Update2)

By James Rowley and Nicholas Johnston

Oct. 2 (Bloomberg) -- The U.S. Senate passed a $700 billion financial-market rescue package loaded with inducements for the House of Representatives to approve the measure following its rejection of an earlier version. . .

Michelle Malkin, as is her wont, scorns euphemisms and pungently calls it as she sees it:

Kill the bailout: Operation Hold The Line

By Michelle Malkin • October 2, 2008 05:32 AM

The massive, unprecedented trillion-dollar-plus (remember, they just pulled the figure from thin air) Bailout Crap Sandwich With Sugar On Top returns to the House. A vote is expected on Friday. I keep hearing and reading that public opposition to this rushed-through monstrosity has “softened” in the wake of the Senate’s approval last night. I’m not sure why the bailout pimps keep touting that talking point when countless Americans trying to express their vehement disapproval can’t even get through the FUBAR House e-mail system! . . .

I noticed the same thing as Malkin did -- lots of journo chatter on programs like NPR's Marketplace business report that sentiment is turning in favor of the bailout. But the actual evidence presented is very thin. Business journalists and newspapers have signed on for the bailout, and you're not going to get anything like an objective description of the reasons for opposing the bailout. Gwen Ifill would be more likely to back McCain.

Marketplace did a segment yesterday based on the oh-so-objective assumption that those opposed to the bailout were irrationally resentful, and willing to hurt themselves to get back at Wall Street's masters of the universe. I'd say the public is rationally resentful of having its pockets picked to help those far wealthier than themselves.

I'd also say it's irrational to cure a debt-caused crisis by loading up the country with still more debt. And still more irrational is the assumption that the presumption of mortgage-backed securities are undervalued now. Those securities were wildly overvalued during the housing/credit bubble.

This supposed disaster of falling prices is really just the market correcting that mistake. When that process is finished, the economy can start to grow again. And by the way, the affordable housing will have been corrected. The more government intervenes to (vainly) re-inflate the bubble, the longer this inevitable process will take, and the more taxpayer money will be wasted.

Instead of doing a pseudoscientific piece calling those who oppose the bailout as irrational, Marketplace could perform a much more useful service by probing the psychology of bubbles. There was plenty of evidence at the time that real estate values had gotten totally out of whack with economic fundamentals. But those who discussed this were ignored. Cheerleaders were more valued than expertise. Why do people keep making the same mistake, and how can we prevent it?

But Marketplace apparently isn't talking to folks like me.

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