Monday, September 29, 2008

My Take on the Bailout

Disclaimer: I do not want this to be a political blog, but the current crisis affects us all and at this point is beyond partisan politics.

Hoo boy!

So Bush's $700 billion bailout plan has failed to pass. I don't know if this is good or bad. That's the whole problem. No one knows if it is good or bad. No one knows if it will fix anything. I do know a few things. I know that Wall Street tanked today. That means my pension is worth peanuts. But I also know that JP Morgan Chase bought out Washington Mutual and Citicorp bought out Wachovia. That means I still have a bank account. I know that I have seen other things rushed through congress that weren't particularly good ideas, that with a little more thought might have turned out better.

I see a lot of people on message boards freaking out that we will all be standing in bread lines if this doesn't pass.
I see a lot of others angry that we are bailing out the rich with nothing helping the little guy.
I see a lot of little guys wondering why they should give a rat's patooty if all their neighbors lose their homes, cars, retirement funds, because they don't have any investments so they have nothing to lose.

I repeat. Hoo boy!

I'm no economist, except for trying to run my own household, which has held up fairly well so far. But I do have an opinion on this. I think it was right to fail today. Wall Street is waiting to see what goodies they are going to get. They don't want to sell out for 20% if they think the government will give them 80%. But they need to face this on their own for awhile, not just be handed free money. The worst of these banks NEED to go bankrupt and be bought out by solvent banks with better lending practices. We need to return to regulations that were put in place after the Great Depression to prevent this kind of mess. If we just hand them the cash, nothing will change and in a few months it will all go down the toilet again.

As I type, Europe is bailing out some of their own banks. As I already mentioned, solvent banks are buying out bad banks in this country. We need to let that take its course. Then see what is left, see what REALLY NEEDS bailing out, not just who wants to save their butts and their "golden parachutes". Congress needs to go back to the table, clean up the now 110 page bill (it started out at 3 pages) and decide to do what is best for this country. Not what is best for their buddies, not what is best for their personal accounts, not what is best for their reelection bids, but what is best for America. We can't just stop the bleeding, we have to heal the wound.

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