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Cramer Suggests a Solution

I can’t say that I am a fan of Jim Cramer (thestreet.com), his out of the park sceaming style does not appeal to me, where is Lu Rukeysar when I want him?  But Cramer suggets a solution to the housing debacle in this piece.  I can see at least two big problems with his solution, the effect on the US Dollar (it would surely weaken it further) and the same thing Soros said, at some point investors in our debt will revolt and demand higher interest rates. Debtors do not have the luxury of doing anything they want and the US is a world wide debtor.

I have enjoyed reading the comments and articles that Intermed II posted on WEB CT. Most of you favoring regulation did not have a specific idea like Cramer, apparently the FED does not either as he points out. And most of you were in the camp of most economists suggesting this is really not much or that responsible folks are more likely to pay debt or save, than spend.

ACCT 5130 thre is now a discussion tab up on your web ct site.  Paste your article in the comment section so folks can reply to your article in threaded fashion. It is only required that you respond to one but a I said you will be graded on the quality and participation of your responses. I am certainly open to suggestions about future topics.   In the two managerial clases the next topic will center of Deming’s Total Qualtiy Management Ideas. The handout on Deming is posted on WEB CT for you under Assignments or Handouts.

I hope that you are finding this exercise to be worthwhile, clearly it is sparking lots of opinions that we would not get to hear in the short time we have together each week.

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One response to “Cramer Suggests a Solution”

  1. Maria D Bravo Avatar
    Maria D Bravo

    The more that I read, the more confused I am. I read the “Cramer” article before I finish reading yours. I thought that it was the solution; then you said that you see two big problems to this solution “the value of the dollar, and that investors will demand higher yield”, so…is there a solution to our problem?
    When I read Bush’s stimulus plan I kind of like it. It may not be a long term solution, but what I see is that many people don’t go out to spend money because they fear about recession. Many of these people are able to spend, but by watching the news the last thing that they want to do is get rid of the little cash that they still have. I see the stimulus package as a way to make people feel confident about the economy; if people don’t fear, they will do one of the best things that Americans can do: spending! In addition, if nobody has come with a long term solution, then at least government needs to do something on the short term. Government cannot be sitting just watching how the U.S economy sinks. It may not be a good decision, but at least it will get us out of the hole for a few days while they think of something else.
    I see that reducing taxes, and lowering interest rates will give people more freedom for spending, but I still don’t understand what the consequences of making these decisions are. What is the down side of reducing taxes? Why government doesn’t do that?

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