Tuesday, September 23, 2008

Slow down just a little, honey

What if the Congress does not take the bait and enact the bailout? It would not be pretty.

Credit markets would seize up, trillions would disappear and jobs would vanish. Without enough jobs, nothing much else happens.

Some guessers think as many as 11 million Americans could lose their jobs if the big money business and housing markets are left to find their bottoms. That’s almost ten percent of the U.S. work force. Not pretty.

Despite the Bush Administration’s best in-your-face efforts to get in our wallets, there is a slow-down mood gaining traction in Washington committees.

Is it wrong to ask for a little more foreplay before we get screwed?

Conservatives are beginning to shy away despite pressure from Bush; liberals instinctively have questions. Don’t forget, up until last week, Treasury Secretary Paulson was wrong at every step about the severity of the economic crisis. Is he right this time?

A rich guy from Houston paid for a full page ad in today’s New York Times that calls Bush, Paulson and Bernanke “the new communists.”

Harsh? Overboard? Yes. And I would not go that far. But so is a trillion dollar bailout that does not punish bad behavior. That's unbelievable.

I don’t pretend to have the answer. But I am worried about my retirement accounts and I am thankful the Congress has not yet panicked into giving George Bush and his cronies the license to plunder the U.S. Treasury. With no legal recourse?

What arrogance.


sph said...

I just had a conversation with my "Central Texan" who thinks along the lines of "The South Plainsman". This crisis hasn't happened overnight, right? Do you think the "politicians" (Paulson etc) knew this was happening and were just trying to keep this quiet until post-election so the new administration would have to deal with it? I am trying so hard to understand it. What if there were other solutions earlier and the time for resolution has passed?

Talk about partisanship - I don't want to think anyone would risk the sovereignty of my country for personal gain. My "Central Texan" husband is a mortgage holder for several entities and even HE can't explain it to me.

I forgot again, we shouldn't point fingers. Well, “you don't should on me and I won't should on you...”

The South Plainsman said...

A little slow down here makes a lot of sense. Nobody likes to get screwed without even being kissed, as George says.

If taxpayers are going to bail out Wall Street, should not taxpayers get an ownership interest? Or are we going to just give them all a big windfall?

The experts say we will have disaster if we do not do the bailout. Has anyone considered the results if we do it? Will the long term costs be worth it?

My view is that Congress should not be in such a rush to adjourn and should stick around to soberly contemplate this. Something as consequential as this needs thorough study and debate.

And they should debate it in the open, so all of us yokels out here can know the issues. In spite of what the people in Washington and on Wall Street think, we are not all stupid.

The South Plainsman said...

SPH is on to something. Something such as this was being forseen in the New York Times as early as September 30, 1999.


I suspect that like most politicians, they were all trying to put off doomsday as far as possible, hoping for a miracle.

My fear is that the current bailout will only postpone the inevitable. It will just transfer the burden of the debt involved to us, the taxpayers, but it will still have to be paid.

This is a bi-partisan screwup if there ever was one, and it will take a unified appraoch to deal with it.

Max Fischer said...

I agree with you George, as well as the sph and The South Plainsman. Time will dictate whether the bailout is rendered "socialist" or a move that saved capitalism. Herbert Hoover sat on his confused butt and within the blink of an eye our system collapsed, the suicide rate went sky high and unemployment was nearly 30%. FDR's New Deal is widely mocked today my conservatives, however the proof is in the results that putting people to work (postal jobs, building roads, etc.) instilled pride in our people and got our economy and markets churning again. If we have 700-bill to save Wall Street, we can't ignore the individuals who were laying in this huge bed with them that was so monumentally crapped.I look at history, which is my "higher authority". In my lifetime, "supply-side" (trickle down) policies have failed and led to two recessions. The "look out, here comes the Democrat to raise your taxes" stump is getting so tired and it just doesn't have the footing to back it up. Desperate times require desperate measures. I feel if we're going to save the banks, we need to also offer help to the customers of those banks.

I digress.

George is correct, let's slow down with Simon and Garfunkel wisdom; "slow down, you move too fast...life, I love you...feeling groovy"

sph said...

We all seem to agree that the bail out proposal has the smell of last week-end's fish market. Even if this financial catastrophe could have the uniting power of 9/ll, it couldn’t possibly be worth it – because someone who doesn’t deserve to be rich will probably be richer. And my friends at the Food Bank will only be hungrier and more frightened. And I, at retirement age, could be in line with them………

Hearings in the open sound good (and I think CSPAN has some of them.) Unfortunately, my current cynicism says all the behind closed doors manipulations and trade-offs is what "Here, sir, the People govern" has come down to. Pelosi sounds scarily clueless as much as I hate to admit it.

It hurts to agree but postponing the inevitable rings true also.

And work programs sound good. CEO's with multi-million dollar bonuses working off their company debt at minimum wage.

Keep posting, George, Jeff, Plainsman, Goose and Max and all you others – you’re keeping me sane. I have a sense of clarity or faith in your opinions and obviously I have NONE is this administration.

George Phenix said...

Here's another question: why does Paulson want to pay Wall Street more than the junk is worth?

Jeff Hebert said...

I've got to be honest, I am starting to wonder if we're even being told the truth that this is as big a crisis as it's being made out to be. Chris Bowers makes the case that it isn't here.

George Phenix said...

I need to correct myself. Bernanke, not Paulson, hints of paying more than the junk is worth.

Same sin.

Ira said...

I'm with Jeff on this one. I feel like we were set up and Congress is being pushed into panic mode once again and asked to approve some massive commitment without any facts. And, the taxpayers are expected to pay for the decisions of Congress. Maybe it's time for some "tough love" on Wall Street.

The South Plainsman said...

George, to answer your question: He does not. Nobody knows what it is worth. One cannot tell the good stuff from the bad stuff because nobody knows which is which. That is what is at the bottom of the crisis. Too many derivatives carved up into too many pieces so

The South Plainsman said...

The last comment should have finished with:

so no one know what is too much or too little. I suspect that they will buy the things at face value or at some discount from that. They may not have to buy much at all, or they may have to do the whole thing.

Jeff Hebert said...

Interesting, from Andrew Sullivan comes this find out of the 2008 Republican Party Platform:

"We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself."

I'll be curious to see if they stick to this, or if it was just a funny talking point.

The leading theory on the liberal blogs is that the Republicans will vote against the bailout plan allegedly due to any Democratic extras that get put on it, paint it as the "Bush-Pelosi Plan", then run against the Democrats on it in the next election, repudiating both liberals and Mr. 19% approval rating.

Anonymous said...

Before we all jump from the nearest highrise, we need to look at whether a bail out is justified for all the 'little' people that would be hurt.Face it, most, and I emphasize 'most', of the big boys have sent are ready to send their largesse to other areas of the world for safe keeping.Whether this is cash or goods,it doesn't really matter.
The 'little guy' can't afford to do this because he's already at the end of the financial rope.
These are the people that sph is concerned about and rightfully so.
It is on the backs of the 'little guy' that this country became so prosperous.The rich literally built their empires from those efforts.
Now that I have said this,I must say that a bailout is not the answer. It is a temporary fix for a problem that will be ongoing unless it is double dipped in the lye soap of cleaning and is not allowed to get even close to the problems we have now.
I think that a bailout would be the 'tip of the iceberg'.We just don't know what monster lurks at the end of the problem.
Those people that were elected to represent us,need to straighten this mess out before we worry about who is going to have to live with the aftermath.
It took both parties,playing their superiority games that got us here to begin with.----Goose

The South Plainsman said...

Goose may be right...or not. I do not know. I do think we should think all of this through carefully. And ignore ideologues. We need clear thinking from everyone. This is going to be a tough one.

Anonymous said...

Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence...

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Franklin D. Roosevelt
1st Inaugural Address


Anonymous said...

I'm seeing my financial advisor next week for our annual review. I think I'll tell him that I want to invest $3000 in some failing companies and that I really don't know what their value is, but I might get some small return on the investment sometime, and oh yes, I forgot to tell you these companies had some shady dealings and might be under investigation, but they really, really need the money...sound like a good investment? Joanne

The South Plainsman said...

Liked the quote from FDR. Sounds like "deja vu all over again" doesn't it?

Jeff Hebert said...

This article draws a distinction between the money market bailout of $105 billion previously made and the TARP bailout Paulson is arguing for now. He is conflating the two, the article argues, but the previous bailout averted the crisis he is claiming is still imminent.

It's sounding like a bait-and-switch, with an already-averted crisis providing cover for and justification of a huge power and money grab.

Anonymous said...

Finally, I must speak my thoughts. This country has survived a hell of a lot more than this crap that there are 18 comments on at this point. Let the banks go under, the stupid a-holes that made millions preying on the ignorant people who could not make a mortgage payment unless the taxpayers subsidised them, get rid of their yachts and get a old fashioned J.O.B. In plain language NO BAILOUT!!!! This country WILL survive.
An ignorant injuneer!

Ira said...

If this bailout doesn't work -- and there is a growing consensus that it won't -- the U.S. will be a third-world country. We will be standing in line to work for $2 per and all those outsourced jobs will finally come back home. Ain't it great?

BTW the endgame of Monopoly is that one person ends up with all the money and property. I think it's time to learn Chinese.

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