Reason Why Bailouts Are Not Working
There is a reason these bailouts are not working to restore public confidence in the financial system. Its because there has been no explanation on how banks and financial institutions will conduct business differently in the post-crisis era. Americans realize that there needs to be some changes in the way the banks and the financial system works. Currently the faith has been shaken. I don't think people are buying the proposition that a magic pill in the way of cash infusion heralded by Paulson will cure the nation's economy of its problems, especially when many experts have already voiced their opinion along this line.
I think an important action step that the Economists who advise the Government and the likes of Paulson need to do is outline some key steps to the public on what these Financial institutions will do differently now. The plan needs to reassure the public that whatever reasons/phenomenon that brought the economy down to its knees will not happen again.
Do you agree ?
That's a point well made. They have to level with the American people and explain the systemic changes that will be put in place to stop this kind of failure again. Kind of like a broad overview of a plan like SOX that was put in place in the aftermath of the Enron failure.
They need to make the damn system more transparent now, that is the change that better happen now. And now that the G8 countries are involved with a combined stake or so it seems, I am not sure if America will have to put up with a union of sorts into the forseeable future.