In the glue
Lefties overjoyed at the prospect of banks running out of cash should note that money markets also hold federal and local government securities. What happens when Maryland doesn’t have the cash in its coffers to make payroll, and the money market no longer exists? What happens is they send the employees home and tell them to come back when they get more cash. To the extent that you think a large and well paid civil service is a good thing, this should distress you. megan mcardle
In so far as the current credit crunch has registered in the lefty blogosphere it seems to have been greeted as a long awaited comeuppance – which it is. But, as Ms. McArdle points out, big state liberals would be wise to hope it passes. The alternative is that all those public sector union jobs vanish. No more helpful interventions from government. While this would be grand from a libertarian perspective, it would be the end of the world for the public sector left.
September 23rd, 2008 at 1:56 am
You should ask former Australian Prime Minister Gough Whitlam (1972-75) for his advice on what to do when the government runs out of money (in his case, the Senate blocking the budget). Writing public servants IOUs and requiring them by law to accept them as payment, if I recall aright.
September 23rd, 2008 at 2:52 am
Of course these are the same lefties who slammed the banks for discriminating against the poor , by not lending them money, well now we know what happens when the poor do not pay back their obligations. The Left needs Capitalism in order to pay for their jobs, (by taxing corporations, business, and the Middle Class ). Corporations and Banks lose money, hence no taxes collected , and less money to pay for all these lefty jobs in Academia and the Government.
September 23rd, 2008 at 5:54 am
As much as I would rather it were not the case, my humble little business runs on credit. I make my orders on credit cards. I send out 30 day invoices to customers. When they pay the invoices I pay the credit cards. The small difference between what I get paid and what I throw on the cards buys my groceries.
My understanding is that, last week, we came within a hair of my VISA not working for purchases of new parts for my store. And within a hair of 95% of my customers not being able to pay me for the work I perform and the parts I sell. Less than 5% of the money that comes in is cash now. Most of my payments are by cheque, debit, and credit card. No functioning banking system means my business would no longer work.
Scary.