James Poniewozik of Time magazine writes Tuesday that the business media should shoulder some of the blame on the failure of the Congressional bailout to pass because of its inability to explain the gravity of the situation.
Poniewozik writes, “It’s not like the financial press has swept the story under the rug, certainly. But what we’ve generally seen are either dire â€” but very vague â€” warnings, or the general argument that, if credit dries up, that affects loans to businesses and little guys, and people start to lose jobs.
“That’s all well and good as far as it goes. But it doesn’t get to the question of degree. Businesses will be hurt â€” OK. But businesses are hurt in a lot of economic downturns, some of them mild, some of them so catastrophic they threaten our civilization. Which is this? How badly will business be hit? Like in a typical recession? Or like in 1929?
“That’s not a small consideration â€” especially when you’re looking at a $700 billion rescue package. If your mechanic tells you it will cost thousands to fix your car, you reasonably want to know: if I don’t make the repair, could I die? Or will the wheel just keep making a funny noise?
“Likewise: $700 billion to avert the collapse of the world economy and a new Great Depression? Sure. $700 billion to avert a recession? People are reasonably going to doubt that. Economies have recessions; you don’t necessarily go into hock and restructure the economy every time that happens.”
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