Disclaimer: I don’t understand the economy any better than John McCain. (Phrase gleefully cribbed from Lou). So, maybe that’s why my inclination is to just let Wall Street burn, metaphorically of course. That’s easy for me to say here on the near side of an abyss that’s speculative at this point.
But, the Bush administration is insisting on a “clean bill” which seems to be a Bushism for “Gimme, then go away.” That bill was floated called for unreviewed, unfettered discretion by the Treasury Secretary over $700 billion to basically give to the folks who have been profiting off this mess for years in exchange for toxic debts of unknown nature and quantity. They seem to be using the current turmoil to stampede the Congress into rash action. We’ve seen this play before – Iraq and the Patriot Act come to mind. We haven’t had a happy ending yet.
I wonder if these bail outs are analogous to the policy of the Forest Service in putting out all of the fires as they cropped up. This seemed like a good idea at the time. After all, fires are dangerous, and you don’t know who is going to get hurt. But, over time, this policy had the effect of creating a tinder box. When the fire did finally come, it was a mighty conflagration that caused an inferno which did a lot more damage than the smaller fires would have if they’d been allowed to burn. Similarly, perhaps letting the current economic fire burn would do less damage over the long haul. But, maybe I’m wrong. Like I say, I don’t know any more about the economy than John McCain.
I think this is the inferno.
I could be wrong. I got A’s in economics, but that was a long time ago.
Of course, Palin’s D in econ was even longer ago. So if I’m needed to render an opinion, I’ll do the best I can without consulting the entrails of a moose.
What I do know is that if the problem was unregulated markets, you don’t fix it by giving more money, no strings attached and with no oversight, to the same people who lost the original money.
I’ve heard the banks who need this to survive are also making demands (like no renegotiation of interest rates for those defaulting on their loans). Maybe just enough pause to let them sweat and think would be in order right now. I would rather the people they made the bad loans to should pay, with the banks accepting less as a penalty for their stupidity in lending. But their plan is to put it on my tab. Why the banks are in a position to demand, I have no idea.
I would have to agree with the above, and add that this whole ordeal stinks of politics way too much. And I am not referring to the past politics of deregulation, but more to the effect of an administration who has proven incapable of handling anything, and now insists on splitting ways with party faithful to push a lousy bailout through congress– all in the name of economic survival. This thing is going to come back to bite democrats one way or another, and mark my word, Bush and his cronies will be in the background laughing all the while.
What I do know is that if the problem was unregulated markets, you don’t fix it by giving more money, no strings attached and with no oversight, to the same people who lost the original money.
That sure seems like common sense to me.
I’m concerned by the lack of press review of Section 8 of the bailout measure – as discussed in the Huffington Post:
“DECISIONS BY THE SECRETARY… ARE NON-REVIEWABLE… AND MAY NOT BE REVIEWED BY ANY COURT OF LAW OR ANY ADMINISTRATIVE AGENCY”
Gee, that sounds like a great idea, there.
“Gimme then go away” is how GWB has handled every other corporation he’s ever handled, all of which he’s driven to bankruptcy, why should this be any different? Someone else always foots his bills.
For those liberals who missed the Sept 18 editorial in IBD (Investors Business Daily), let me enlighten you…
“To hear today’s Democrats, you’d think all this started in the last couple years. But the crisis began much earlier. The Carter-era Community Reinvestment Act forced banks to lend to uncreditworthy borrowers, mostly in minority areas.
“Age-old standards of banking prudence got thrown out the window. In their place came harsh new regulations requiring banks not only to lend to uncreditworthy borrowers, but to do so on the basis of race.
“These well-intended rules were supercharged in the early 1990s by President Clinton. Despite warnings from GOP members of Congress in 1992, Clinton pushed extensive changes to the rules requiring lenders to make questionable loans.
“Lenders who refused would find themselves castigated publicly as racists.”
http://www.ibdeditorials.com/IBDArticles.aspx?id=306632135350949
well if an IBD editorial said it, it must be true! consider me enlightened!
but wait, what’s this? an actual study of CRA loans found “that CRA Banks were substantially less likely than other lenders to make the kinds of risky home purchase loans that helped fuel the foreclosure crisis.” (pdf link)