I’ve always enjoyed CNN’s financial arm, CNN Money. I’d actually wish they would drop their ridiculous HLN television channel and make a CNN Money that competes with CNBC, only without the douchebags obsessed with the Dow. But since we don’t have that I do have their website. Like most sites there is plenty to hate, but again I enjoy CNN Money more so than many others.
I stumbled upon a little chart they made called “The Bailout Matrix”. It’s designed in flash so even if I wanted to embed the image here, I can’t. Check out the link though to see what I’m talking about.
The Bailout Matrix is a graphical representation of all the government programs launched in the last couple of years to either fix the economy, or just hold it together. Some of the standout gems include: TARP, Cash For Clunkers, AIG bailout, and Fannie/Freddie bailouts. They’re each ranked on two scales: Bold to weak, and working to ineffective. I’ve lost 20 minutes already just staring at it and thinking about each bailout and considering whether or not I agree with CNN Money’s positioning.
And I don’t. The best way to explain this is to pick a few examples. We’ll start with the auto-bailouts which CNN Money has decided was not only the most bold government move, but also the most effective. For WHO? First of all, there is nothing bold about $83.5 billion when AIG alone was over $100 billion (they’re tied for boldness) and TARP was $372 billion. The GM/Chrysler crap was a forgone conclusion and while it was bold, it was not more bold than TARP. I would guess CNN Money ranks TARP as a weaker move because they did not directly take over the companies they invested in. Honestly, for the government, it was a bold move to use so much restraint.
Another disagreement has to do with Cash For Clunkers. CNN Money says that the program did work, but it was a weak move. Now I can only assume that they are ranking this low here because it was only a $3 billion program. Considering the massive spike in sales as a result, they really couldn’t have put more into the program without the American public becoming used to a government subsidy on cars. Again, restraint is a hard thing to do, especially when a program actually works.
But I don’t hate this chart. I actually love it because it puts so much into perspective for the viewer. So what if I disagree on the positioning of specific bailouts, that’s just me being anal and after all it is largely subjective. I actually wish that CNN Money would take this chart to the next level and make it interactive. They could include details on each bailout and maybe even let people rearrange them into their own charts. I’d likely do that if I could embed that here.
What we cannot forget is, no matter how successful (or failed) a program may be, they are using borrowed money to finance it and it must be paid back, by you.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
