I would say that each case has to be considered on the basis of its merits,i.e., down side versus upside, with the main consideration being what is best for the citizens, not what is best for the business. In general, it's a bad idea, in a capitalist society, for the government to bailout failing businesses.
It was far from laughable. And without our government and one of the most competent central banks and Treasuries in the world, things could, actually would, have been much worse. By the way, you don't know what "printing" is. Consult any undergraduate economics text book. If the Treasury had actually printed that much money we would have experienced disastrous inflation and a collapse of our credit worthiness.
It looks to me like the money supply defined as m2 has gone up by three trillion since 08. It either got there by the treasury printing it or by private banks creating it by lending.
Piezo, it seems to me that you know something about reading science papers, but that may only be because i'm not a scientist. But when it comes to economics, you are way over your head. You have apparently read some introductory economics book, and you think you've got the subject of economics down cold. But from your writing, it is quite obvious that you don't even know enough to be dangerous.
Bernanke called it "printing". Are you trying to tell me you have a better understanding of the process than Bernanke? Here you go, Piezoe. Skip to 8:05 and begin there. LOL...
Excellent. So the government should not have bailed out GM, AIG, etc....glad we're in agreement on this and can move on.
Not at all. Even some good economists occasionally refer to expansion the of Fed Balance sheet as "printing" but they know, of course, it isn't really printing. It is lending, and the operation is reversible. The money created is borrowed, not just created out of thin air unattached to debt. This operation does not fit the economist's definition of printing. I corrected Fhl because he obviously is thinking that QE is actually printing, whereas when an economist says "printing" they are usually using the term loosely to mean "effectively printing." Did you notice that when the interviewer says, "You've been printing money" Bernanke answers "Well, effectively." But he did not say, "yes, we have been printing." Why? Because, while what the Fed was doing was "effectively", for the moment, like printing, it was of course not actually printing. In a hearing before the Senate banking committee someone accused Bernanke of "printing" and Bernanke was quick to correct them. He said, and I quote, "I'm not printing." In this official setting where semantics mattered, Bernanke was very careful not to use the term "printing" incorrectly, or loosely. You would not generally, I hope, refer to bank lending in fractional reserve baking as "printing" even though "effectively" it is at the moment the loan is made. But in net terms it is nothing like printing, because it is money created out of debt, and that's a transaction that goes in the reverse direction when the loan is paid back. The Federal reserve can not "print" . Only, the U.S. Treasury could do that, and if it is done without restraint, it will quickly destroy the value of a currency. When a country "prints" it is doing so out of desperation, and this is invariably caused by a collapse in credit worthiness to the point that no one will lend to the treasury. Thanks for posting that good interview with Ben Bernanke. I think it will be obvious, to anyone who takes the time to watch that video, what a genuine and honest person he is. I can't think of anyone more competent, level headed, or smarter to lead the Fed during a Financial crisis than Bernanke. We were extremely fortunate to have him as Fed Chair during the crisis. (I can think of others equally competent, but no one more competent. Yellen is also very good, by the way!) _________________ P.S. The definition of "Printing" is in every undergraduate economics text. I tried to get Fhl to read the definition. Obviously, it was to no avail. What Zimbabwe did was actual printing. They just printed as much money as the needed to pay on their debt without creating any new debt. And of course their money and credit rapidly became completely worthless.
I did not say that they should not have been bailed out. I would never say that! that would be irresponsible..