Friday, October 03, 2008

the bailout

I was encouraged this week by the House of Representatives' refusal to accept the 700 billion dollar bailout proposed by the president and the Treasury secretary. Why should we fork over that much money just because the people who drove our economy over the cliff tell us it's necessary? But now congress has approved the new improved bailout that is costing 150 billion more dollars than the first one. Were our congressmen just waiting for more pork to be added to the barrel? We're in trouble. We cannot trust anyone in government. There has been a tremendous transfer of wealth from the middle class to the wealthy and powerful. I don't understand why Americans are not rioting in the streets.

Members of congress, can I speak to you for just a moment? You're gonna have to quit taking money from lobbyists. I know it's going to be hard, especially since you are so morally weak. If a representative from a corporation sends you on lavish vacations, contributes to your campaign, or extends any other favor, they will expect something in return. They will want your influence and your vote in matters that will help them get an advantage in the marketplace. There was a time when that was called bribery. You can call it by anything you want, but it's still bribery. You're gonna have to quit it. The American people expect you to be honest.

Lobbyists, your gonna have to quit taking advantage of our ethically challenged public servants. You might think what you're doing is legal, but that's only because you have influenced the legislators to pass bills whose language make it legal, but it's still wrong. I know you have bought and paid for our congressman and insist that they belong to you, but I'm asking you to set them free. For the good of the country. Isn't that what your asking to taxpayers to do? To bailout the corporate incompetents for the good of the country?

And voters, we have some hard work to do. I would never presume to tell anyone how to vote. But, I urge all voters to investigate, read, study the issues. If we are uninformed voters then we are all fools. Write your congressman and tell him how you feel. And next month, vote.


Anonymous said...

You are so right that we cannot trust anyone on either side of the aisle in national politics, and I believe it has trickled down to all levels...a sad state of our nation today.

I, too, cannot believe that for political expediency, upcoming elections, etc. that this bailout has been passed. MANY constituents did contact D.C. to plead for another option, but they did as they pleased, rather than as we asked.

You've got it right - get out and VOTE! -sd

Lorna said...

These are perilous times.

ml said...

I must be missing something, from the look of your post and comments. The bailout was framed for us, as a necessity - to prevent the commercial paper market (the daily lending of businesses money to stay afloat) from freezing up (lenders no longer will extend credit to borrowers). This is what happened in the Great Depression, so we have a roadmap of what not to do. What not to do is just do nothing while we root around for other options.
So government HAD to step in to prevent collapse of the credit markets. The first attempt at a bailout bill - last Monday - failed because there was such an outcry against it by constituents that congress voted it down. So it didn't pass this time because of political expediency, like your commenter says (according to my understanding). Congress was between a rock and a hard place, risking their popularity with voters by taking leadership.
I'm not happy with it either. Bush's policies have lead us to this. But I see it as a necessity.
Now, what am I missing here?

wally said...

What upsets me about the bailout is the fact that when there was a public outcry against it our representatives simply added 150 billion dollars of additional pork. I agree a bailout may be necessary but is the one the culprits come up with the only alternative? This crisis is not a surprise. The financial wizards have seen it coming, but couldn't pull themselves away from the obcene salaries, bonuses and profits to apply the brakes in time to avoid going over the cliff. Our congressman knew about it but their pockets are full of money from those same financial "geniuses" who were steering the economy. So I fear the remedy that was so quickly put together. Whenever the politicians and their masters say something has to be done "quickly" that's the time to stop and do some careful examination. The economist James K. Galbraith gives this alternative: "With banks, runs occur only when depositors panic, because they fear the loan book is bad. Deposit insurance takes care of that. So why not eliminate the pointless $100,000 cap on federal deposit insurance and go take inventory? If a bank is solvent, money market funds would flow in, eliminating the need to insure those separately. If it isn't, the FDIC has the bridge bank facility to take care of that. Next, put half a trillion dollars into the Federal Deposit Insurance Corp. fund -- a cosmetic gesture -- and as much money into that agency and the FBI as is needed for examiners, auditors and investigators. Keep $200 billion or more in reserve, so the Treasury can recapitalize banks by buying preferred shares if necessary -- as Warren Buffett did this week with Goldman Sachs. Review the situation in three months, when Congress comes back. Hedge funds should be left on their own. You can't save everyone, and those investors aren't poor. With this solution, the systemic financial threat should go away. Does that mean the economy would quickly recover? No. Sadly, it does not. Two vast economic problems will confront the next president immediately. First, the underlying housing crisis: There are too many houses out there, too many vacant or unsold, too many homeowners underwater. Credit will not start to flow, as some suggest, simply because the crisis is contained. There have to be borrowers, and there has to be collateral. There won't be enough."

I especially like the idea of using the FBI to investigate and audit those failing companies. And if it is found that the CEO's have been cooking the books, prison sentences would be in order.

lfvalle said...

That's the world, the society, the human behavior.
I try do understand why people are corrupted so easily, in such important representative.
I can't talk about usa political situation, but Brazil is passing by a critical, moral problem in politics.
The corruption is difused all over the society.