I want to be honest on this blog....
1) McCain's idea to suspend his campaign and push for a postponement of the debate is a bad idea. It seems like a stunt in itself. I don't want to accuse McCain of ducking Obama, but....
I understand the concept. The nation is in crisis! We must provide leadership! However....
a) When did this become a crisis? Why now? Why is it immediate?
b) I would like to think that if it is truly a crisis, then all politicians on both sides of the aisle would act that way. I don't even see half the Republicans acting in crisis mode, let alone Pelosi & co.
2) McCain could certainly make a good commercial out of this - and a good point. Where is the Democratic Congressional leadership on this? You have Harry Reid out there last week saying "We don't know what to do". Great...these are the people currently in charge.
3) And hell if I know what to do. The bailout, to me, just seems wrong. If P&G made a bad decision and our stcok plummeted (like, say, IN 2000!) - no one would ever bail us out. Why these banks? Why should I care? I pay my bills, I have a responsible mortgage - part of me says screw them - let them fail.
I can see Wiz blowing his top here.......so make the case. Why should $700 Billion of taxpayer money go to saving some banks?
As long as FDIC doesn't go under - which, from all indications, it won't - then why should I care?
You can probably guess I didn't take an economics class in college....
9 comments:
Eric,
I tend to agree with you. They made the bad business decisions, now let them deal with the consequences. Then again, I didn't take an economics class in college either. ;)
I suppose I can see the general point being made that if all of these banks fail the whole financial system will come crashing down. But here's my idea: Before a single dime of taxpayer money is pumped into these companies, how about they take back every single penny of bonus that was paid out over the past 2 years while this crisis was building? Add all that up and let's see how much we've got. If they still need more to keep them afloat, cut the CEO salary in half, at least. If they still need more then we can discuss other options.
I see absolutely no reason whatsoever that ANYONE in any of those companies should have received any bonuses for helping to drive the company into the ground. I also see absolutely no reason why the CEO's of these companies should be raking in millions of dollars a year while the American taxpayers have to cough up their own money to save the very companies those CEO's are in charge of. I mean, it's simple business management, right? If the company doesn't have money you lay people off and cut salaries.
After that you look at all the bad mortgages you have and you write them down to a level where the homeowners can actually make the payments. Now instead of a bunch of foreclosures you've actually got income. Not as much as you'd like, but it sure beats the hell out of nothing.
After we take all of those steps above we can talk about the government stepping in to provide assistance if it's still necessary.
Wow, I'm really pretty incensed about this issue.
This could be a first. I agree with Eric and Dudeman. Don't bail these idiots out. If they do decide to do it, then the CEOs and CFOs should go to prison. This is bullshit.
I agree with dudeman. If we are going to bail these asses out, then take all of their bonuses over the past 2-3 years. If they want to keep their bonuses, then we don't help them out.
I have never been so disgusted with the gov more than I am now. Hold the line and let these companies go under. As you can see, smart investments will go into the companies that are run properly and are worth salvaging. The ones that are not will go under and other companies will pick up the slack.
Layup, the only problem I see with letting them determine if they want to give up bonuses and get bailed out or keep bonuses and not get bailed out is this: The asshats that got the bonuses will just keep them, let the company tank and then move on to another job with another company where they can get even more bonuses.
If this is really a crisis of such a level that the lack of a bailout would cause the entire economic system to collapse (as they are claiming that it is) then there should be no options given to these companies. If this really MUST be done then the law should say this is what we're doing, period. You will pay back all the bonuses you were given and you will write down mortgages to a manageable level for homeowners. End of story. If you do not pay back your bonuses you will go to jail. If you have already spent your bonuses then I'm sorry, but you will need to find some way to come up with the cash. That's a YP, not an MP. Give it back or go to jail. Those are the only choices these bastards should get.
I have a massive fundamental problem with this whole bailout concept. While this may be overly superficial, the problem seems to have occurred as a result of the following two factors: (1) regular citizens who ended up taking home loans they ultimately couldn't afford and (2) corporations/businesses extending those loans to people who couldn't afford them.
When the former group started to suffer the consequences through foreclosures etc., we heard everyone saying that responsible citizens should not be punished for the mistakes of the irresponsible and that was their mistake and their problem and I don't have too much of an issue with that.
But now it's the businesses who issued the loans that need help and all of a sudden we have to help them out when their situation is really not fundamentally different, i.e. they made a series of business decisions that backfired. What message are we sending about the US economy and US capitalism in general if we essentially step in and "save" certain select businesses (determined arbitrarily by the government)? Basically, that they can take whatever risks they want because if they don't work out, big brother will be there to stop the fall.
It's anti-American if you ask me (and I would know as someone who is literally un-American!). The cure is potentially worse than the disease. Sure the short term consequences of business failures could be significant, but not as significant as the precedent set by the government artificially re-structuring the economic markets in a manner they deem appropriate and beneficial.
I can't SEE straight.
Shoot them all.
Hang 'em high.
Every last one of them.
Let me see. I'll go to vegas and bet it all on red. I win and pocket the winnings and bet red again. Ooops, I lose. Fortunately, the government will restore my original bet.
Ahhhh, life is good ...here in France.
I too hate this bailout plan. Between this and the money spent on the Iraq war, we're screwed financially for the next 20-30 years at least. I wish I better understood the economics of it, but I don't get why Paulson is insisting on 700b all at once, without a clue how he's going to use it. Couldn't we try a smaller amount at first to see if it could kick start things? If it doesn't work, then reevaluate in a few months.
Also, I keep hearing that the gov't could end up making money and that Buffet et al keep talking about how great an investment this is. If so, where are the private buyers?? Why is it left to the gov't to bail these crap-ass companies out??
Either way, it doesn't seem like there's much of a choice. The consensus from financial experts on both sides of the aisle seem to believe that we're royally screwed if this doesn't work out. It's pretty scary to think about the trickle down of this failure. 12%++ unemployment. Plummeting home prices. Inability to get loans for homes, college, cars, businesses. Bank failures. Retirement savings lost after a market crash.
This is such a f-ing mess.
I have so many thoughts about this right now... but I think Neil's last paragraph summed it up well.
Yes, the solution may help in the short term, but the cure may be worse than the disease. What we are proposing doing is to continue to prop up a financial bubble through government action. That seems unwise.
Laura's list of things that may happen are certainly scary (except the plummeting houing cost part - ask Layup if he'd like a 60% redcution in housing value in California).
here's what I don't get......and I may be an idiot (not to Kermit and Laura: you are not allowed to use that quote against me).
Sunday I wagered on football (9-6, for those paying attention!) , watched the Browns lose again, and watched the US win the Ryder Cup. Everything seemed normal.
Now I'm told - by EVERYONE - on Tuesday that the US Financial world will end NOW NOW NOW without action TODAY!
9/11 was a crisis that changed America in a day because, well, there was an attack on 9/11.
What switch was fipped here? How did we go from "yes, we need to worry abotu this" to "the end of the world"?
I don't get it.
Why can't we wait until October, November, or January to take action? What's so magic about getting a deal done by September 29? Will all the withdrawal slips at the banks simultanouesly self-destruct?
I just feel like I am watching a late night TV show with Billy Mays Hays telling me "I have an offer, but you must call within the next 30 minutes...."
If a salesman is trying to sell you something, and wants to rush you into making a decision, that's a bad sign. I want to run away from this deal as fast as possible. It's the behavior of ALL politicans that bother me.
Well, not all....look who scuttled the deal tonight... House Republicans.....:)
I just came up with an even better idea. Give them as much money as they say they need for this bailout. Then subpoena the salary records of every employee in every company that's getting bailed out, including any and all of their subsidiaries. Calculate the average salary of all of those employees, minus the top-level executives. Then we take back all the bonuses, etc that those executives received over the past few years and we garnish their wages for every cent above the average salary of their employees. They will still pay taxes on the income they take home after garnishment. Any other income they receive other than salary is taxed at 90%. This continues until the bailout money is paid back. If they die before this happens their spouse's/children's wages will be garnished at the same level. Continue until the entire loan is repaid at whatever interest rate is set at the time of the loan.
Well if we all agree then why the fuck are the Democrats and the President trying to push through this bailout?
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