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Here are a few economic things to read about. Which would you rather be today, angry, depressed or frightened? Hahaha, the answer is always "all three!"
Here are a few economic things to read about. Which would you rather be today, angry, depressed or frightened? Hahaha, the answer is always "all three!"
Of course it could be in the interest of a homeowner to do a strategic default. But it's not too hard to see why there's a cultural stigma about it – if people started doing that, loans would dry up even further and would close off home ownership to even more people who were uninvolved in the housing collapse. American Airlines going bankrupt mostly affects American Airlines. (And their employees, debt holders, etc.)
One of two things is going to happen in the next few weeks: either the Germans will relent and allow the ECB to start issuing Eurobonds and acting as a buyer of last resort, or the global economy will collapse and everyone on Earth will be like "Why didn't the fucking Germans allow the ECB to start issuing Eurobonds and acting as a buyer of last resort?" Except for the Republican Party, who will blame it on the estate tax and the Clean Air Act, somehow.
@stuffisthings To put it in the form of an analogy: trying to practice economic policy in today's political environment is kind of like trying to do heart surgery without using the defibrillator because the patient is extremely worried about his electric bill.
@stuffisthings Well, "war against Germany" got America out of its last depression, so maybe we should try that again? (it's also just the kind of spending Congress will approve of!)
The Surowiecki piece on AA's bankruptcy glosses over the fact that one of AA's main goals in declaring bankruptcy was to beat its unions.
@jfruh: Which brings up what I'm pretty sure is the REAL difference – households have no unions to renegotiate with. Or employees. Or shareholders. There are a lot fewer levers to pull with a household in bankruptcy. They can sell assets, they can put more family members in jobs (hah), and other than that it's "no debts and bad credit for a while." Not sure if this translates into a moral imperative but it certainly is "a difference."
Well, now I'm taking my handwritten "Alex Balk" note to the Golden Gate Bridge.
@whizz_dumb You know the whole thing with putting your fingers in your ears and going, "LalalaIcan'thearyou"? I need to do that, but with my eyes.