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And we'll get delicious pastries.

Posted by keshmeshi | September 26, 2008 12:06 PM

The guy friend should be shot.

Posted by Bellevue Ave | September 26, 2008 12:06 PM

That sounds like a reasonable economic stimulus proposal (a good alternative to the stimulus checks that were sent out, since I'm sure the multiplier effect with lending the money to small businesses would be greater).

But, the folks in Washington are thinking about this as how do we secure our banking system and ensure it doesn't fail. They're probably thinking that if half of our banks fail, the economy is doomed no matter what happens from the ground up...

So, it seems like pairing this type of approach with some kind of insurance on the mortgage-backed securities or government investment in the banks in exchange for a stake (like the AIG deal) would be a good approach.

Posted by Julie in Chicago | September 26, 2008 12:38 PM

According to what I'm looking at the SBA makes about $1 billion dollars worth of loans in a year. Your scale is off.

What you're saying is similar to a thought I've had. As I've been trying to understand this, basically our banks are all shot and this plan is trying to "reboot" our banking system. I wondered, well why not just make new banks?

I think that's infeasible though because of the scale of the problem. You're basically suggesting that our new bank be created by making the SBA a hundred or a thousand times larger. That's not a quick solution and not a long term solution.

I don't think people want to nationalize the banks. They want equity to reduce how much we get fucked but eventually we're supposed to get back out. Blowing up the SBA wouldn't lead to that.

Posted by daniel | September 26, 2008 12:44 PM

But how do these sound investments help out the corporate lobby?

Posted by formerly OR Matt | September 26, 2008 12:53 PM

Simply put, WaMu was victimized by a classic "run on the bank." Customers withdrew $16.7 billion in a 10-day period following the bankruptcy of Lehman Brothers, leaving WaMu "with insufficient liquidity to meet its obligations," its regulators determined.

A longer explanation is WaMu was victimized by mismanagement and misguided bets on exotic (and toxic) instruments such as option adjustable-rate mortgages.

-yahoo: wamu run

Posted by infrequent | September 26, 2008 1:34 PM

Jonathan, you are tarnishing the "science" brand by holding forth on subject areas wehre you know less than nothing.

And yeah, thousands of your newly jobless neighbors will surely thank you for bringing down WaMu. Wait til you see the multiplier effect on that one.

Posted by RonK, Seattle | September 26, 2008 1:48 PM

Very well RonK.

I think that science is more than a bunch of trivia. Science is the notion that ideas are proven (or disproven) by facts.

Obviously by commenting this way, you fashion yourself as some financial genius, with me as knowing "less than nothing."

Educate me. Seriously. Tell me what I wrote that was incorrect on this post. Should be easy, readily easy, to disprove the few meager statements I made here--if I'm the big fool you fashion me to be. Argue with facts, not insults and we'll all be impressed.

If you seriously believe that I brought down WaMu, then you are perhaps too big of an idiot to even put together a rational or empiric argument. I've laid out my case, repeatedly, citing facts, other analysis and even the plain old numbers on what happened with WaMu. Prove. Me. Wrong. Or, fuck off.

Believe me, I'm more than a little concerned what this "sale" of WaMu will mean for the local economy. I'm also more than a little concerned about how expensive and ineffectual the bailout plans seem to be.

But, hey, let's go with your plan of maintaining ignorance and stupidity. The score today? I attempted (successfully, I think) to explain the multiplier effect concept. You ran your big fucking mouth, whining about me. Who did more to help out?

Posted by Jonathan Golob | September 26, 2008 2:12 PM

Jonathan, don't bother. RonK's little more than a troll.

Posted by Cascadian | September 26, 2008 2:32 PM

The bailout is a very very very bad idea.

Posted by Will in Seattle | September 27, 2008 12:15 AM

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