Monday, September 29, 2008

THE BAILOUT

The news is reporting that Americans do not support the Wall Street bailout agreed to in Washington yesterday. This is fine, but frankly probably misguided and pointless. I suspect that almost all of us are disgusted by a culture that was giving $100,000 bonuses eighteen months ago, and is now in need of tax payer money to remain viable at all. Sort of a poor little rich girl thing.

If the only thing happening here were ensuring that the tremendously wealthy remained so, it would be a terrible use of resources. But it isn't. The point of the bailout is to try to ensure that the day-to-day economy continues to function. Make no mistake, the CEOs at the big financial companies are better positioned to make it through a serious disruption in the economy than the people in the polls who don't support the bailout. Ultimately 90% of Americans are probably the intended beneficiaries of the bailout. It's just that this time, the money goes to the financial institutions.

Oh, and part of the problem is also your neighbors who aren't paying their mortgages anymore. Don't forget that the real estate market helped create this issue, and that people took mortgages that they had to KNOW they could not pay. The banks never should have offered them, and the buyer never should have accepted them.

So, tell pollsters that you are furious that the financial industry is where it is, but make sure your elected officials votes for this.

UPDATE: Well, the House rejected the bailout. The Dow is down about 500 points (give or take), and we will see what happens with regard to the larger picture. Hard to see how this will help "Main Street" as they like to call what I call "America." Let's hope that the markets built possible rejection into their planning.

As an aside, CNN had its own Dewey Defeats Truman moment on this story. See the second blue line from the top, which says "Bailout moves towards Congressional approval" while the headline below is "Bailout Plan Rejected." Ooops.


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