I’ve never had more thanks and faith in this mostly useless congress than yesterday. It was a day that Democrats and Republicans alike revolted against their party leadership to look out for and listen to the people (who voters were rejecting this bailout at a rate of 100 to 1). And because a bailout didn’t happen – are the stock markets collapsing today? NO – we’re up by big margins in fact. The sky didn’t fall (as I predicted) because in its heart of hearts – Wall Street knows a bailout is coming eventually. I still predict more down days (which NEEDS to happen) but Wall Street certainly hasn’t died by a long shot – and won’t. I was proud of our Oregon Rep Peter DeFazio – who called it just as it was (OPB interview of his vote – and worth the 5 minutes to hear) – and stood for his principles. He just earned my vote next go around.
Yes, government intervention needs to happen (see below for why), and I almost half think this attempt was just show to make Wall Street’s immediate fears stop so they could get a breather for a real bill. Still this was a really BAD plan that we should all be hugely thankful for it not passing. There was growing evidence this bailout would just be a stop-gap, and in the end would have just deflated our currency and raised inflation (I agree) – and still wouldn’t have worked (did nothing to stop the downward spiral of house prices). There are other financial experts weighing in on this matter in rapid order as DeFazio points out. Many of those plans keep the burden on the financial institutes and Wall Street where it belongs – and many nearly or do pay for themselves without giving an acting Fed Chairman complete cart-blanc with absolute freedom without penalty of the courts. Many of those methods were lessons learned from the 80’s hedge fund bailouts.
So keep writing your senators and reps daily – encourage them to do the *right things* – and not let something get ram-rodded through for the sake of doing something. The last time that happened we ended up in an unjust war in Iraq. When crisis’ hit – you don’t knee-jerk react – or you get a knee-jerk solution. Tell your senators and congressmen to take a breath – because the markets will allow it – and get a correct fix.
Let it all fail!
Still, it’s amazing how many folks on forums and around the web are dead set against the bailout for the wrong reasons – “Let the banks fail!”, “F* Wall Street!”, “Stop Corporate Greed!” – and other idiotic statements. “I don’t want to pay for Wall Street’s fat cats” – well neither do I. But guess what – you’re wrong that we can just let this all collapse now. Its gotten too big now. Go read about the collapse of 1929 if you need a little primer on how and why an entire market collapses and what happens to you at home when that occurs.
But another point I want to make my fellow Americans – before we love to start pointing fingers around – this time it was clearly not 100% corporate/Wall Street misbehavior like Enron was – this is different. Yes, you did have financial institutes lending way too much money on too little capital (estimates were that some firms were leveraged to $5 trillion for every $100 billion in actual assets to back it). I’ve said it several times, and I’ll say it again – the people not paying their debts this time are US. WE are the ones not paying our housing mortgages because we got in over our heads. WE are the ones that did not do our basic financial homework when making the biggest purchases in our lives. WE are the ones running up record debts that some cannot pay in our own life times. OUR INDIVIDUAL POOR DECISION MAKING has been feeding into this for years – and now the piper has come due. Oh yes, banks and financial institutes stupidly let us – and they should have known better. They did have a job to do and blew it royally. But we are the other half of the equation – and everyone chose to ignore the many financial planners that had been urging restraint and caution all along. As one blogger put it:
This road to destruction was paved with the best of intentions – that everyone should be able to own a home. Unfortunately, that reality is much more difficult than just opening the doors of loaning to everyone.
The rules of good personal and loan management have been known for years – and we chose to disregard them. And lest you think you have some right to talk, I now, because of my GOOD planning and reading the signs – may get to pay back $2000 for each of your bad decisions. I think that gives me more right than anyone losing their home to b*tch. Next time you don’t think that actions have a consequence, every man woman AND *every child* in this country also just inherited $2000 worth of debt due to this actions. That 6 year old just got saddled with $2000 in debt. Nice legacy folks – well done.