tHE eCONOMY , the public, and banking Bailouts

1. tHEeCONOMY, the public, and banking Bailouts Drew THURMAN

2. :THESIS • While past research reflects that the public generally does not support bailing out major companies, current research indicates that evaluating value perspective over moral relevancy, preserving important franchises and stabilizing economic conditions all lead to a healthy market.

3. moRALrELEVANCYVS.vALUEpERSPECTIVE • This subtopic discusses research regarding the popularity between economic decisions in banking bailouts. One side provides the idea saving failed companies (particularly banks in this review) is immoral and should be discouraged. The general public consensus is that bailouts are parallel with that of tax payer money being insurance for companies deemed too big to fail. • The other side of the argument is that of saving the U.S. from economical, and financial disasters. Saving big companies means saving companies dependent on the larger ones. • Take-away, research is typically inconclusive and on going in that government officials side with the value perspective idea while the public sides with the moral obligatory stance.

4. PRESERVING ECONOMIES ANDtAXpayer Frustration • This sub topic discusses why tax payers feel frustrated that saving giant corporations is a waste of tax payer money. Research suggests that the public believes conserving their money as a form of a safety net is irresponsible and frustrating • Research in this paragraph also conveys while bailouts are considered immoral and irresponsible, but why they are absolutely necessary. The sources in this paragraph articulate the effects of not saving a company that would be catastrophic if not salvaged.

5. Future solutions • This subtopic revolves around a source that explains how Korea was able to avoid a financial disaster and how they didn’t use tax payers money. • This sub topic describes how the government should utilize private investors, “rainy day” funds, and other companies to help back failing corporations. • This paragraph helps the audience identify that the research is trending throughout the years and how it is typically inconclusive. That being said, research suggests newer methods should be utilized in situations such as these.

6. Conclusion • By incorporating my thesis statement: “While past research reflects that the public generally does not support bailing out major companies, current research indicates that evaluating value perspective over moral relevancy, preserving important franchises and stabilizing economic conditions all lead to a healthy market.” I will highlight the sub topics, conclusive evidence and what the sources and research have currently come to terms with. This conclusion will elaborate on how past research conflicts with current but correlates with research that might come and how newer methods are being conducted to help nurture hurting economies.

7. WORK CITED • Works Cited Calabria, Mark. “An End to Bailouts.” The National Review 65.1 (2013): 33-35. Web. 20 Jun. 2014 Cordella, Tito. “Bank Bailouts Moral Hazards Vs. Value Effects.” Journal of Financial Intermediation. 12.4 (2013): 300-330. Web. 18 Jun. 2014 Gandel.Stephen“After Three Years and Trillions of Dollars, Our Banks Still Don’t Work.” Time.178.12 (2011): 40-45. Web. 20 Jun. 2014 Guillermo, Rosas. “Bagehot or Bailout.” American Journal of Political Science. 50.1 (2006): 175-192. Web. 15 Jun. 2014 Kauko, Karlo. “Do Bailouts Cause Moral Hazards or Franchise Value in Banking?” Kyklos 67.1 (2014): 82-92. Web. 18 Jun. 2014 Lee-Myung, Bak. “How Korea Solved it’s Banking Crisis.” Wall Street Eastern Edition.253.5(2009): 11-13 Web. 16 Jun. 2014 Mckinney, Jeffrey. “Banking On A Bailout.” Black Enterprise 39.8. (2009): 66-70. Web. 20 Jun. 2014 Smith, Roy. “The Dilemma of Bailouts” The Independent Review Vol. 16.(Sum.2011):15-26.Web. 16 Jun. 2014. iIn the graders comments 2-3 of the sources were suggested to be replaced and switched with articles from scientific journal.