What’s a Techie to Do About the Financial Crisis? We Ask CATO Institute (video)

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    NEWSLETTERS

    TK

    As I mentioned late last night, a lot of us who do this technology punditry for a living are searching for answers on what exactly this mess on Wall Street and inside the beltway means for us in the tech sector. All Americans are in the same boat, having been told to fear for the very existence of the standard of living we all hold so dear, but then given absolutely no tools to help us delve into the issue and find the answers that tell us what we should be angry at, afraid of, or smug over.

    I had similar conversations with Adam Ostrow and Sean Aune on Monday - both of them noticed the same thing I did, and that was that almost all news (particularly tech news) that had nothing to do with finance and politics had trickled to a standstill. Coupled with a deluge of financial questions and a drought of understand, I decided to ring up Jim Harper of the CATO Institute. 

    Jim is a tech savvy lawyer for the free market-centric think tank CATO, as well as blogger for a number of blogs that tackle both politics and technology. The idea in sitting down with Jim was to get a handle on what all this insane financial lingo actually meant in English, and to help connect the dots to how it would affect us in the tech sector by looking at the effects on venture capital, advertising markets and available consumer dollars.

    I could have chosen from a number of think tanks, but I decided on Jim for two reasons. For one, I knew Jim from a panel we were on together at the Tech Politics Summit in DC back in March. The other, and perhaps more germane, is that CATO is one of the few organizations that flatly oppose the bailout proposed by the President. Even though I call myself a Libertarian (and thus a believer in free markets), I didn’t have enough of a handle on the situation to understand how this was a tenable position.

    You can sit in on our discussion by playing the embed below or by grabbing the MP4.

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    A Very Broad Summary
    There was a lot of ground covered by the discussion, but most poignant was his general position on the urgency of the matter. Based on the research at the CATO Institute, the effects of the collapse of large investment banks deigned the direct recipients of the bailout money are largely localized to investment banks. More to the point, this means that while there are ripple effects on consumer and business banks, these effects are driven by emotion and consumer behavior and not by what’s happening on Wall Street.

    Jim went into some specific cases in which there were “Main Street” bank failures, and how these banks are managing themselves through these failures, but by and large he was of the opinion that our government in general and Congress in particular should take their time in assessing the damage and deciding what to do. He shied away from giving exact timetables, but he indicated that weeks, not days, should be devoted to watching and investigating the effects to both gain an actual understanding of the matter and see what actual economic damage would and would not be mitigated by the system.

    Some Suggested Resources for Further Information
    Jim ended the show with a number of resources and places to get coverage of the bailout mess - there certainly is no shortage of that anywhere - but if you found interesting the analysis proffered by Jim Harper, you might enjoy the links he gave me after the show.

    CATO’s Daily Podcast: Where they’ve been very closely following and providing analysis on the events as the occur as well as the proposed policies in response.

    WashingtonWatch/blog: A website and blog that Jim Harper contributes to, designed to track and decipher the bills in front of Congress.

    CATO-at-Liberty: The blog of the CATO Institute.

    Technology Liberation Front: a team blog (with a cast of writers that almost rivals the number here at Mashable) devoted to following news and policy that intersects the worlds of politics and technology. Jim Harper is also a contributor there.

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