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While I don't follow the news, politics, stock tickers, or anything relevant to the world with any regularity, I try to stay relatively informed on a general level. I stop by CNN.com to browse through the big stories, I watch The Daily Show and The Colbert Report (because I'd much rather be entertained than knowledgeable), and I'll read a newspaper every once in awhile. The news often baffles me in a "how can people be so stupid?" kind of way, but I can usually grasp the gist of what they're talking about.
Until this stock market collapse hit the news.
I don't understand a word of it. As far as I gather, a bunch of companies who deal in mortgages went tits up because they were promising more than they could deliver. These companies are somehow vital to the American economy, so President Bush proposed to give them 700 billion dollars to bail them out. Congress didn't want the money to be given with no oversight, so they revised the bill. Congress then rejected the bill they wrote themselves and started blaming each other for failing to do anything.
What the fuck is going on???
I never understood economics, and I still don't. Just today I had to go to Wikipedia in order to find out what "finance charges" are and why they're on my credit card bill. Now I'm being told by everyone on TV that I should vote for the presidential candidate with the best economic plan. Far be it from me to disagree with the TV, but I don't know how to pull that off. I may know the syntactic differences between "money," moneys," and "monies," but I don't know how any of them factor into an economic plan. Obama or McCain could pop on TV and say, "My plan is to find the pot of gold at the end of the rainbow," and I'd be going, "You know what? This guy's using his head!"
Unless you have a degree in Finance (I'm looking at you, Virgil), I don't see how the vast majority of American voters can be expected to understand what's going on. Look, I'm really trying here. I want to understand, but I don't think there's much hope for me.
The economy is just too damn complex. For instance, I was listening to This American Life on the NPR podcast the other day (JP outs himself as a closet hipster), and I learned that apparently you can buy and sell stocks that don't exist, and that's totally legal (short selling). It's only illegal if you fail to deliver your hypothetical stocks to the buyer that you've never met (naked short selling). And that's just one of the bizarre little tidbits of finance that seem batshit insane to me.
As I understand it, economies must expand and contract. They can't just grow and grow forever. I also learned once that there are now safeguards in the stock markets to prevent a catastrophic collapse like the one that happened in 1929. It seems to me that the economy may take a downturn for awhile, but there doesn't seem to be a reason for this particular downturn to be the harbinger of the downfall of Western civilization. I truly don't understand how Merrill Lynch going out of business is going to shatter the economy. Why was our economy being balanced on the whims of a few CEOs in the first place then? Why would giving 700 billion dollars (under any conditions) to companies who fucked their shit up in the first place be a good idea? Isn't that like rewarding lousy work? Isn't that like giving a Masters Degree to someone who didn't do any of the reading for his classes?
Wait... never mind.
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The Stock Market - Much simpler when it was simply the place to buy your soup base.