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What's your opinion on the bailout?
We've been hearing a lot from the bureaucrats, politicians and pundits about the U.S. government's plan to restore confidence in the financial system by rescuing banks from tons of bad debt. We'd like to get your opinions and hear how you're being affected. Your thoughts and experiences often shape our coverage. You can submit your comments to our Public Insight Network, post them here, or on any of our stories pertaining to the crisis.
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No one is going to argue that the current state of affairs is nothing less than a complete mess. What I find surprising is how quickly so many people are pointing the finger at corporate America and the American government. Where in this process did individuals lose their responsibility? The mortgage meltdown has just as much to do with irresponsible borrowers as it does irresponsible lenders. I don't view the governments actions as shouldering the taxpayer with the burden of paying for the mistakes of financial institutions. I view this as taxpayers shouldering the burden of the mistakes of other taxpayers. Homeowners and banks alike made plenty of mistakes along the way. And let's not forget that companies pay taxes too. You don't hear the tech industry complaining that their tax dollars are going to bail out the financial industry. This is a problem of our society and our society is trying to fix it.
It's the earmarked (though completely unbudgeted) $700 BILLION bridge to who knows where ! !
We need to have corporate leaders who will admit enough shame to put themselves on the
Lee Iacocca $1/yr salary plan
or have Congressional leadership that will enforce it.
How did we ever allow ourselves to capitulate to the siren song of "No oversight is always better?"
We are experiencing exactly what we deserve--the highest levels of chaos resulting from uncritical belief in a feel good dogma closed to all other views or concerns.
So, OK. Let's recap.
The failure of our entire financial system in ten easy steps:
1). Originate a mortgage loan for somebody who has no ability to pay for it, based on fraudulent statements, and ignore the fact that good-quality loans are how banks make money.
2). Package those loans as default credit swaps, and take them to a rating agency like Moody's or Morningstar. Bribe said agency to give you a AAA+++ rating on those worthless loans.
3). Make lots of money by selling the loans to major financial firms like AIG or Bear Stearns as an investment. Repeat several times.
4). Wait until the loan gets foreclosed, along with millions of others, so that housing prices will plummet, people go homeless, and these major financial institutions fail, because they FILLED their entire portfolio with your useless and fraudulent securities.
Then after that:
5). Get sickeningly drunk on even more cash as you naked short-sell the stock of the aforementioned big financial firm you sold the bogus investment to.
6). Have a small chuckle and a beer while you think about how cool it is that you don't ever have to even own or borrow the financial firm's stock to naked short sell it. (But strangely though, if I sold you a car I didn't own or couldn't at least borrow to sell later, that would be, um- illegal??)
7). Watch in bemused "oh-well-darn-somebody-looked" befuddlement as the Fed and the Treasury Secretary get suckered into setting policy that prevents speculators from reaping billions of dollars in profit from naked short selling the stock of failing financial institutions. Meanwhile, watch the SEC Chairman (who is supposed to be responsible for formulating the aforementioned policy) attend a birthday party, and spend several weekends in the Hamptons.
8). Collect $600 as our bumbling buffoon of a president steps in to 'help-ify' the problem by sending you your own money in the form of a "stimulus check", which you will be taxed again on later.
9). Watch in amazement as the Fed does nothing to interest rates, since it has its hands tied:
Raising rates will cause further collapse of the housing market and more large financial institutions to fail.
Lowering rates will cause massive inflation, a weakening dollar, and skyrocketing commodity prices.
...And this situation renders the Fed absolutely ineffective in doing the ONE job it is supposed to do: regulate inflation.
So then what does the Fed do?? It acts in a different way, which is equally as stupid, not in their job description- and much more like what the failing financial firms are doing out of pure desperation to save themselves.
...It offers to put the whole mess on the Federal Credit Card. That is, it decides to bail out all of these failing financial firms with current taxpayer dollars, and then decides to create more available credit for itself by auctioning off more debt in the form of increasingly worthless U.S. Treasuries.
...Wait- isn't that what got us into this whole mess in the first place?? You know- borrowing money that will never get paid back? Oh wait- I forgot. The U.S. Government will never be insolvent- even with TRILLIONS of dollars of debt on its books. (or will it?)
...And now even GM and Ford are asking for a bailout.
Well, my heavens. I have some bills I need to pay. How about a bailout for me too?? ...At least I'd know how to be responsible with the money.
10). Now, Laugh, Laugh, Laugh as the bill comes due, and the comet nears the horizon...
Hello? Maybe if the banks would start looking beyond their customers most recent credit reports when considering home loans, give the people they threw out of their last home another chance to buy, they might start seeing some profit. There are hundreds of thousands of people that were FORCED into loans that they would never be able to pay off simply because home prices were so over inflated. Now, they will not lend to that person when they need it most? STUPID!
It takes a lot to get me upset, but when I heard that "our" government is planning to bail out the financial institutions of wall street I went past "upset" and just got plain and simply "PISSED OFF"!!!!!! Why would we want to bail out people that are just going to get into the same hole in a few years? Do the words "history repeats itself" mean anything to the IDIOTS in washington?? It's hard for me to feel sorry for someone that has repeatedly shown that they have no respect for hard working law abiding citizens. It's all about the money and nothing else, and when they get in trouble, just go to the taxpayers and they will bail us out and we can go back to our crooked ways. Well this is one "taxpayer" that says enough is enough!!! Let the fat cats of wall street take the fall and the consequences for making bad financial decisions just like the rest of us. I think that $700 billion would go a long way towards fixing Social Security, so that ordinary people like me would'nt have to worry so much about what their retirement will look like.
I am disgusted. I am a responsible tax payer and property owner. We as tax payers are bearing the burden of the people and institutions who were greedy, manipulative, or kept their head in the sand.
I am tired of hearing stories of people "losing" their homes. Are those of us who were responsible and managed our risk within the bounds of acceptability going to be rewarded for this, no, we are paying.
I share the same sentiments of the comments posted so far, anger, disgust, hold those acccountable that created the mess, I want solutions that will work for taxpayers and financial institutions, for the least amount of my taxpayer money. I am not a financial expert but I think that we've jumped right into this bailout option without at least addressing what truly could happen if we took another tack on this. Instead of just assuming the 'experts' are correct in this broad notion of economic failure, whatever that means, I would like to look at what would happen, if we use a different solution. My only question for NPR or any news organization is this:
What if we let the "free market" run its course (as I've seen Ron Paul propose) with some help or with no help from US taxpayers? We're told, and I want to question the premise, that our markets will collapse if we don't do something right now and for a lot of money.
We don't hear enough reporting on the alternative to what is being proposed currently (that most American oppose anyway-from the polls that I'm seeing), a non-bailout solution.
I recognize that Congress is proposing changes to a major bailout and I have more comfort in seeing that option compared to the Paulson option.
I expect interest rates to increase, stock prices to continue to fall, and other financial effects, whether we pour money into this or not. And there are no guarantees that this will work or that more money would be needed in the future. I also expect, at some point for our economy to recover, in either scenario. I say we 'Embrace the Suck' and let these investment firms (not banks) fall on their faces and then spend some of the taxpayer money on something other than the companies that put themselves in this position.
Perhaps this means WaMu should have let those bankers out of the "bankers pen"? Maybe all those stodgy old guys in the "bankers pen" could have taught the hip and groovy spokesman a bit about risk, and capital preservation.
There is a reason bankers are supposed to be stodgy, tradition bound, unimaginative,and NOT "hip and groovy'. This is why.
It took longer than it should, but I finally realized why I was so angry about this bailout proposal and the current convulsions of our financial system.
We - the people of this country, along with our legislators and our entire government - are acting as co-dependants. As an adult child of an alcoholic, I should have seen it sooner, but knowing this makes it obvious to me that every move we make to rescue our failing financial system can only bring us to the beginning of another round of excess.
President Bush's open mike comment that 'Wall Street definitely got drunk' should have been a wake up call for all of us. Who better to tell it like it is but an alcoholic?
We need to remember during all of this, that much as Paulson and friends would like us to believe otherwise, the financial system is not the same as the economy. They have a powerful effect on each other, but if we simply allow the financial system to fail, it will wipe out the den of thieves, their credit default swaps, and their shareholders (who should have been listening when Michael Greenburg told us about credit default swaps, and dumped their shares). Healthy banks will survive and new banks will arise to provide the financial services we need and we might then be able and enlightened enough to keep them small and diverse, and thus have a robust system that can deal correctly with risk. It will be a difficult time, but that is a given, no matter what we do at this point. We need to at least refuse to perpetuate the system we have now, because they will do this again, and again, so long as we continue to enable them.
Why do we assume that the government will be able to get money out of the bad loans when the capital markets failed? Printing more money will not cover this debt. What sort of restraint will be applied to these "bailed out" banks to ensure they change policies?
I fear this is going to get very ugly.
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