Bailout Fails ... What Next?
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Bailout Fails ... What Next?
Congressional and White House officials are scrambling to structure a new bailout proposal that will attract reluctant lawmakers and soothe the unnerved financial markets after the House rejected a massive rescue plan for the nation's economy. What do you think of the bailout? Are there alternatives? How does this change your opinions during this presidential election year?
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4 COMMENTS SO FAR
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September 30, 2008
11:19 AM
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Tony Burt said:
The whole of Congress (Jews and Gentiles alike) is absent today appropriately enough celebrating Rosh Hashana (Day of Judgement) so this might be a good day to judge the performance of Congress and nothing could more painfully demonstrate what is wrong than the part they played in the current financial crisis.
We have been deluded into believing that home ownership is a "right" instead of a privilege. So for over 20 years the magic words "affordable housing" and "redlining" led to politicians directing where loans and investments should go, with such things as the Community Reinvestment Act and various other coercions and threats. The "subprime mortgage" instrument was invented by bankers in response to these Congressional demands to swell the number of minority and low-income homeowners these instruments were embraced by Fannie Mae and Freddie Mac.
The FMs were already bloated quasi-government bureaucracies and thus free from conventional market disciplines.
It is a truism that risky investments will, if successful, pay far more than safer investments, there is a huge incentive for a government-supported enterprise to take big risks, since there is no downside to the arrangement there are huge profits if the risks pay off and the taxpayers get stuck with the losses if not. Indeed had Fannie Mae and Freddie Mac been free market institutions, they could not have escaped the consequence of their risky financial practices, no one would have bought their securities.
In reality, President Bush tried unsuccessfully, years ago, to get Congress to create an agency to oversee the dubious financial practices of the FMs.
Fannie Mae and Freddie Mac do not deserve to be bailed out, but neither do workers, families and businesses deserve to be put through the economic wringer by a collapse of credit markets, such as occurred during the Great Depression of the 1930s.
But voters should not be deceived on the eve of an election by the idea this is a failure of free markets and deregulation and that political micro-managing is the panacea.
Leadership is needed now more than ever but ironically 4 weeks before an election is in short supply.
To paraphrase Victor Davis Hanson:
President Bush - a lame duck President spent, tired and knows only that he will blamed for something he tried to prevent.
Rep. Nancy Pelosi - at the hour of national crisis proved why she may well be the worst House Speaker in the history of the Congress
Sen. Dodd and Rep. Frank - shout and demagogue in front of the cameras, the more desperate we know they are to talk their way out of their own past reckless and unprincipled conduct in giving the green-light to the thievery at Freddie Mac and Fannie Mae that started the panic. They will be lucky if they are not ultimately targets of a special prosecutor.
Sec. Paulson - only knows how to bark out orders at Treasury and expect underlings to snap to attention as they did for him as Goldman Sachs. When they didn't, in vain he went to one knee — arrogance to fawning in a matter of hours.
Sen. Barack Obama - true to form only knows how to vote present, clueless while trying to look cool, waiting for calls, and issuing hourly contradictory statements adjusted to perceived CNN punditry and Drudge headlines.
Somewhere, somehow the American people need a steady voice of experience to rise above politics, stop the bickering, calm the country, get the proper guarantees passed, promise the needed reform — and so lead and inspire. The stage is set for someone to play a Washington, Lincoln, or Churchill. An entire generation of leadership is failing, as the world watches aghast. There are not many candidates left:
This is your opportunity, step forward Senator McCaine.
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October 1, 2008
9:29 PM
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Coffeeblack said:
Anyone care to explain the censorship that removed the second comment?
Anyone care to NAME the censor?
"JPR Values Diversity of Opinion" - - ??? Great slogan.
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October 4, 2008
7:26 PM
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Coffeeblack said:
TESTING ONE TWO THREE
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January 21, 2009
9:50 AM
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Larry Caldwell said:
The banking crisis needs to be resolved by nationalizing the banks, cancelling all outstanding shares, buying out the toxic debt, then re-selling the bank to private investors. If they do that, the "bailout" will only cost the taxpayers a couple hundred billion dollars instead of 10 times that much. A newly refurbished bank would sell for almost enough to pay for the repair job.
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