Tuesday, September 30, 2008

Why no bailout?

Representatives in Congress received thousands of phone calls and emails from constituents against the bailout, which some wags have characterized as "no banker left behind" :-)

We can trace this popular reaction against CEOs and Wall St. to growing income and wealth inequality. Ordinary people no longer feel they have a stake in the system. Their reaction may be irrational (even the poorest American has a big stake in the continued functioning of the economy), but it was certainly predictable.

Next spring, unlike last year, less than half of the Harvard graduating class will take jobs in finance. I guess that signals a top in the market 8-/

Related posts:

financier pay

all about the benjamins

a reallocation of human capital

a new class war

non-residential net worth

working class millionaires


Anonymous said...

I don't think the populist sentiment is necessarily irrational. There has been zero hard evidence presented by the government that the bailout will actually help, only warnings that the bailout is necessary. It's not like people are ignoring reasonable arguments and telling Congress to stick it to Wall Street.

Steve Hsu said...

One can formulate arguments against the (modified) Paulson plan, but I doubt most of the average people against the plan could articulate them. It's irrational in that sense.

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