I wholly agreee with Randy. Maybe we are are crazy but this talk of a financial crisis seems to be constructed out of device to protect what Marx called fictititous capital. Forgetting about union contracts for the moment, what would have happened if Chrysler had gone bankrupt and somebody picked up the company for a fraction of what it had been worth previously. The new owner would have earned a healthy profit because the investment would be low. He could afford to pay good wages. Only the investors in Chrysler stock would have been hurt, along with a few Mercedes dealers. A minor shock at best. We call it rational when firms downsize; why can't the stock market be allowed to downsize and let the economy go on as before. Maybe I am wrong/crazy .... Nobody else on pen-l except Gene/Mat/and Randy from afar seems to be interested in this. So maybe I should drop it. Randy Wray wrote: >> 1. someone recently told me a story of a financial official (i can't >> remember if it was a banker or a regulator) who had visited a mom >> and pop >> grocery store in denver to look over the books. her/his assessment >> was >> that the store was hopelessly bankrupt, and mom and pop didn't even >> know >> it. indeed, they had probably been bankrupt for years, and probably >> would >> remain so for years to come. so long as no one looked closely at the >> books >> and inventory (there had been stuff on the shelves for yrs, carried >> at >> purchase price but no longer of any value whatsoever), this store >> could >> remain in business for yrs to come. but any close analysis would cut >> off >> all bank credit and the store would close down. whaddyado? >> >> 2. another story. a regulator at the occ assured me that he could >> take any >> bank, no matter how insolvent, and cook the books to keep it open >> for 5 >> years. and hey, things might turn around. >> >> -- > Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 916-898-5321 E-Mail [EMAIL PROTECTED]
