Bailout

For the most part, I don’t care for proverbs. They are merely one person’s opinion, but they are blindly accepted by many as true because of their age, fame or exoticness. That said, I'm a massive hypocrit. From my time in China, I learned one proverb that stuck out for me. I don’t know who said it or when and I have never been able to find the quote a second time in books or on the internet. If fact, I've forgotten where in China I read it first. So, I paraphrase:

“We are like fish flopping out of water. We know not which way the water is when we flop. We only know that the current situation is intolerable and something must be tried.”

I’ve been reading quite a bit on the financial crisis. And if there’s one thing I’ve figured out, it’s that no one knows what they’re talking about. Economists admit they don’t know, yet politicians and pundits then claim they do. I understand how mortgages work, and I understand what investment banks do, and I understand how stocks and shares relate, and I even understand what mortgage-based securities are. But, to be honest, I don’t really know what giving or not giving $700 billion would do or how it would help exactly.

I had lunch with Soulless Hedonist today and he had the following analogy.

Imagine you have a really, really depressed friend named Wall Street. You don’t know why he is depressed, but he is so depressed that he may kill himself. If you do nothing, he may get better, but he also may actually kill himself and, since he’s your friend, you would feel responsible for his death even though you don’t understand why he is depressed. So, rather than doing nothing, you can buy him an all-expenses-paid round-the-world party vacation for a month. You hope that after his awesome vacation, he will be out of his funk. Of course, he may still kill himself after that, but at least you tried something.

And so is life. We have no idea if we are heading to water, but the current situation is intolerable and something must be tried.