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Listeners let us hear it on bailouts
Letters in a computer with red mailbox flag
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TEXT OF LETTERS SEGMENT
[MUSIC: "I'm gonna sit right down and write myself a letter . . . "]
KAI RYSSDAL: And man, oh man, have there been letters. All it took was the threat of global economic Armageddon to get you going. From the Lehman Brothers bankruptcy to the bailout of AIG and the president's $700 billion plan to buy a bunch of dicey securities from suffering financial institutions.
You may or may not be surprised at this, but most of you aren't too happy about the state of affairs at all. Take Charles Vallee of Milford, Michigan.
CHARLES VALLEE: I may well agree with the need to safeguard the financial structures of international capital, but what's being done to make sure this doesn't happen again? I wasn't expecting to end up owning a piece of AIG. Oh, whoops, I don't get to own it, just pay off its debts.
Sarcasm aside, the general tone from listeners this week went something like this:
That it's just plain unfair for the government to help out a bunch of banks and other institutions that, as you see it, made a bunch of not-so-smart decisions.
Karen Lane from Palo Alto, California, wondered whether there wasn't another way.
KAREN LANE: The mortgages should all have been put back together, with financial help from the feds. Anyone who couldn't afford their mortgage should have been offered lower interest rates or had the life of their mortgage extended . . . regulation to prevent this from happening again and, optionally, demand the return of all of the fat cats' mega salaries and throw them all in jail.
I can't tell you how many e-mails we got on that topic alone: CEO compensation. Barney Frank told me this afternoon, by the way, that he's pretty confident that whatever plan does eventually pass is going to have compensation limits in it.
With the billions of dollars the government keeps spending -- it's almost a trillion if you include Fannie and Freddie, AIG and Bear Stearns -- Jeff Setaro of Columbia, South Carolina, asked a question that might be on a lot of people's minds.
JEFF SETARO: With all the talk about government bailouts lately, what I want to know is, who is going to bail out the government?
Taxpayers, I think, is the answer you're looking for there, Jeff. Now, not all the letters were complaints. Some of you said we should all just calm down, trust the government to do the right thing. I said some of you there. What I meant was, two of you.
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Regardless of who or what caused this mess, "The significant problems we face cannot be solved at the same level of thinking we were at when we created them..." -Albert Einstein-.
We need to think outside the box now...
If the government is going to be spending $700B, then why not help out the American people and help the banks at the same time?
The government could offer people who are having trouble financially (credit card debt, mortgages, unable to get loans to refinance or consolidate loans due to any number of problems but have shown they are willing and trying to pay their bills but have made poor choices, whatever, etc...) a way so they could get a loan from this $700B at a very low interest rate.
That way anyone who has credit card debt, mortgage debt, etc... could pay the banks back, the banks would then be getting their income back up to get back on their feet, the people who get the loans would be out of massive interest rates from banks and financial institutes and be able to get back on their feet again, in all, it would give the banking system money again to be able to work with and increase the common peoples ability to be consumers again.
The government would be getting interest to pay down the national debt, or pay back the $700B, etc... And could even put people back to work, working on implementing this idea.
The Government could even hire people from the banks, using the interest from the loans that were made, to run this thing.
I know this does not cover every base, but it is something to think about.
If the government uses the $700B to bail out the banking system, they probably are not going to see much on their return (in getting the economy back on its feet) anyway, so why not help everyone and get the economy going again.
Anyway, that's my two cents worth; it's about all I have to spare after all the bills are paid. (Unless this went through and I could get a loan at a lower interest rate, due to my poor debt to income ratio...LOL)
Why should be running to bail out the wall street? There needs to be a punishment for the companies who caused this, not to mention CEO salary caps and regulations to start with. Why the banks couldn’t have started going thru their problem loans months ago to try and resolve the problem on their own by refinancing, adjusting rates, etc rather than refuse to make any changes in policy and wait for a bailout. This will do nothing to help the actual homeowners, without a look at individual policies…so why do the taxpayers have to do this instead of the companies that took the risk in the first place. When a house is goes into foreclosure, it typically means it will go for a cut rate price, so why can’t the bank work with current owners to get maybe 75 cents to the dollar rather than 50 cents or less?
"We the People" seems to include only those whose deep pockets make them important to the Bush administration. All of us "ordinary" folks are asking how the government can afford to bail out those poor indigent souls from Wall Street, but cannot provide basic healthcare for THE AMERICAN PUBLIC, security for Medicare funding, continuation for Social Security benefits and other myriad programs that benefit average, ordinary Americans. For the answer, see my first sentence.
If we have to foot the bill, here is how I would do it. For every amount of dollar spent on buying back toxic security, I will demand an equal share from the firm. Say I am buying what amounts to be 10% of Bear Stern bad loan, then this will give me 10% equity of their entire operation, in addition, those firms will have to buy it back, in other words, this is going to be a loan not bailout. Each firm will get a buy back period based on some formula, the more we give you, the longer of course it will take to pay back, but not longer than say 10 years. If you don't pay back, then we sell our share of your firm. Oh, forget about bounce and extra pay, don't expect, as a CEO, to be rewarded for being dump!
This is fair, allows for countablity and make sure that those wall streeter dont push bad loans down on us, say bad car loans and such, they have to think twice or more before they apply for the loan. After all, it is my $10,000 that in question here (my share of the 700B!)
Loan them the money. That's it. Let the failures get bought up. Supposedly this worked in last Chilean crisis. Taxpayers get interest.
If The Treasury printed all the money to save dumb debt in America The USA would go bankrupt.
Leverage is why the banks are in trouble, not real estate. It's the mechanism of leverage. They are lying - again. Let the dumb over extended banks get sold off. There are many buyers.
No socialism for dumb lenders, or borrowers.
Why aren't the president and the republican leadership advancing the free market philosophy related to the mortgage industry? Let the market work its way through the problem. The greedy, white collar criminals that created the mortgage bubble may have to get real jobs that result in real productivity instead of creating another pyramid scheme. Loaning money at 30:1 cover should be a crime. The bail out is basically un-american as I see it.
Providing healthcare to every citizen of the United States is too costly, but bailing out Wall Street fat cats and their ilk to the tune of $700 billion initially apparently is okay. And I say initially because from commentaries I heard this is the tip. I'm pretty sure the rot goes a lot deeper, too. This bailout is really for the rest of the world. Bush wants to shore up falling housing prices. Well, they should be allowed to fall where they may. With all the bogus appraisals and all sorts of wheeling-dealing going on, does anybody really know what their home is worth? I think not. A person with a median income cannot afford to buy a home on their own. The idea of a two people working full-time to afford a home is also a problem. There is no safety net if one becomes sick, disabled or dies. So in all areas we're in a real pickle. There's one heck of a long, dark tunnel ahead before we begin to see the light. I think we should wait until Election Day on the bailout and put in a referendum before the lenders -- We The People!
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