…and here’s where it gets confusing
If America weren’t confused enough about the state of the economy, it now is completely lost. The cognitive dissonance is so thick, Michael Phelps is thinking about training in it for 2012. Let’s do a quick rundown of what your average American is hearing right now (with your humble host playing the role of Joe Sixpack).
President Bush wants the bailout plan which means that all people who hate George Bush and normally disagree with everything he says automatically have to hate the idea of a bailout. On the flip side ardent Bush supporters must support the plan because their leader says it’s time to save the nation’s economy. I mean, no matter how I feel about George Bush, I have to want to save the economy, right? And as my wife says, even if I don’t like Bush, I have to reserve a certain amount of respect for a Presidential address during prime time television that says the nation’s economy is collapsing.
Save the economy! That’s a good thing, right? Of course, it is. It will let me buy a big screen TV, a new car, and several new boxes of ammunition. And do you know what the best thing is? In the world that we live in, there are many ways to be able to save and help the economy grow so that none of us will find ourselves in a terrible financial situation. The stock market has provided a lifeline for so many, especially when the idea of deciding to buy Intel Stock (Intel Aktien kaufen) is growing in popularity with every passing day. You can earn lots of money from this, and it can go toward that big screen TV that you could be longing for, as I am. If you ask me, this could be a great way to help save the economy. Oh, but hold on. To save the economy, I have to bail out a bunch of people who gamble worse than I do and apparently have a weaker grasp on on how to manage a company than just about anybody we’ve ever seen (and that is giving them credit for not just planning to to gamble with the hopes of winning while knowing they would get bailed out if they lost). That doesn’t sound right! So, to wrap up, if I don’t enable a bunch of degenerate gamblers, my country will fall apart? This sounds like a good time to look to our next President. He will know what to do!
Ah, and this one is easy. Both Obama and McCain are for the plan. That means that no matter who I support, I can support this plan and still support my candidate. Whew. I was getting worried I wouldn’t be able to ride first class on the Idealogue Express. These guys are on top of it. They support saving the economy. Candidates to the rescue and all that. U-S-A. Four more years. Suck my eggs. Wha? You’re telling me these two Senators who would travel back to Washington to make a yes vote can’t rally enough support on the other side of building to even get a chance to vote? How can these guys lead the free world if they can’t save the economy? And what’s all this about one candidate taking credit for the bill getting passed when it actually failed? And what about the other candidate not putting enough effort into it? Both of these guys suck? Really? They care more about their candidacies than the economy? Well, hell.
Thank goodness for the media, because they will tell the truth and help me understand. Wait a sec. We’re watching CNN during the biggest point loss the stock market’s history and in the middle of the most high profile Congressional vote in recent memory and the CNN anchors and reporters are literally saying, “We really don’t know what’s going on here.” This isn’t breaking news, new territory, or silence-inspiring terrorist attacks. This is the world economy, parliamentary procedure, and democracy in action. This could be the difference between people deciding to Aktien kaufen (buy stocks) or not. Inevitably, it could also impact the financial situation of many individuals across the country and the world. And you really don’t know what’s going on? Who hired Kyra Phillips and why wasn’t she fired before 5pm? I mean, damn, my friends and I use parliamentary procedure during bar room debates when we’re half in the bag. Point of order, for the love of all that’s holy. (Update: Just as I was posting this, G-Rob sent me this link to someone who apparently agreed with me in part).
Yep, this is where it all gets confusing for the average American. And by average, I mean the people who have fallen into the habit of knowing what to think because that’s what their party or favorite news network told them to think. This is what happens when you parrot James Carville or William Bennett. This is what happens when Michael Moore is your favorite filmmaker or Bill O’Reilly can convince you to stop drinking Pepsi. This is what happens when you settle for 90% opinion, 10% news on your cable news network.
We have to think for ourselves and deal with our decisions. Don’t think Biden or Palin are the best VEEP candidates just because your guy picked them (because, let’s be honest, okay?). Don’t think you will see radical change if the “change” guy or “maverick” guy gets elected. Be honest with yourself about what you need and want. Decide the best course toward that goal.
I’m not innocent here. I’ll admit that. But this is it, folks. This is one of those places in which people can’t tell us how to think.
And, damned if there has never been a better time to be put in that position.
Believe it or not, Wall Street is rigged more so than politics and online poker.
If I believe in limited government and fiscal resposibility, is it just that easy for me to be against a bailout? I say, “Yes. Yes it is.”
Is that a view that is possibly in conflict with the future good health of the economy? Yes. Yes it is.
I do not want the bailout. I want the companies that made bad decisions to fail. The simultaneous privatization of gains and socialization of losses is not a fundamentally sound model and it will lead to acceptance of ridiculous levels of risk that at some point can’t be bailed out.
I will add to this – in response to those that say we are bailing out the economy, not these companies – then why don’t we buy the assets of the still healthy, functioning financial institutions and let them pick up the slack? If my local credit union and internet based bank are running no problem because they didn’t make risky investments why don’t we infuse them with cash to stimulate the economy? Why do we propose to purchase assets priced over current market value to lubricate the financial markets? Because the bailout is for failing banks. You want economic stimulus? Give my family $100,000 tax free.
Also -777 points doesn’t even make 10% of the DJIA. Start talking to me when the DJIA is down 25%, 33% or more. Then its time to shit yourself. If the DJIA breaks below 9000, then we’re in it.
Since I’m firmly in the joe sixpack crowd (but add much more political ignorance since I don’t watch CNN/Fox News/MSNBC), if the bailout goes through is this considered a casino marker or are the Feds giving out food stamps for guys with the Bentleys and homes in the Hamptons?
If its the latter it seems the responsiblity for one’s actions don’t apply here much like a star athlete or hollywood crack-goddess.
Great message for those not in top 1% of incomes continuing to shine on in this country.
“Also -777 points doesn’t even make 10% of the DJIA. Start talking to me when the DJIA is down 25%, 33% or more. Then its time to shit yourself. If the DJIA breaks below 9000, then we’re in it.”
ok cool…meet you back here in a couple of weeks.
i dont agree with the politicians or the bailout necessarily…but things are really screwed up and everyone needs to realize its gonna get a lot worse before it gets better. we have no leadership in washington, and everyone on wall street has no soul. there is no leader that can herd the cats in the right direction…look out for next week, i think the sky might be falling.
I agree with Joker that it’s gonna get worse before it gets better. But it will get better.
Won’t it?
Yeah, I’m a little concerned, especially given my entire livelihood is based on the sale of items that could only in the loosest of circumstances not be considered a luxury.
Give me $700billion, and let’s see what I can do with it. Can’t be any worse than giving it to the guys that lost it the first time, can it?
The president told us the bailout was necessary, that if it didn’t pass there would be a lot more pain for Americans in the long run. We haven’t begun to feel the pain yet; the truth of the matter is that the bailout is a short-term fix for bad actors that puts the pain for America off into the distance. We’ll be better off taking our lumps in the short run than consolidating even more power into the executive branch (via the Treasury Secretary) and trusting them to do the right thing, assuming they’re even capable of discerning what the right thing is.
The biggest problem we face is that there is no choice in our political system. Both major parties represent the exact same interests but wear different uniforms. (There’s a reason that emotional issues like abortion dominate so much of the political discourse in our country.) To make things worse the two major parties have a stranglehold on our electoral system, thanks to practices like gerrymandering districts to guarantee a large percentage of the House never has to worry about reelection and employing armies of lawyers to prevent third party candidates from getting on the presidential ballot. They sacrifice choice for the people so they can consolidate power for themselves.
As long as the political leadership situation remains the same, things won’t really get any better – regardless of whether this bailout package gets revised and passed. The people who caused this mess aren’t really going to be punished for what they’ve done; in fact, they’re the ones the American people will turn to in this rapidly darkening hour. If you ask the wolf to guard your sheep you shouldn’t be surprised come morning when you find yourself with no flock and a great mess to clean up.
One tool we can ALL use in our endeavor to “think for ourselves” is to STOP anthropomorphizing the various businesses (be they a bank, a broker, an investment firm, whatever) who are likely to apply for “bailout” funds once Congress approves the funding (in whatever amount.)
We taxpayers will not be buying depressed assets at above market prices from “guys” – we will be buying them from companies, most of whom are publicly owned by people like YOU and like ME.
Sure, some of the people who are owners of those companies with us WORK for the company, and a very small number of them had enough say in the strategic direction of the company that they should be sacked/canned/given lovely parting gifts. <== humor
That probably will not happen to all of them, and most of us will wish those who DO get the sack would also get a nice beating to go along with it.
But let’s not get on TOO high of a horse, shall we – while what they did was too great a gamble to most of our thinking, they did it because WE pressured them to increase the value of our ownership in their companies (aka, EARN US MORE MONEY.)
There are lots and lots and lots of people who are to blame for this situation, including a goodly portion of the people who signed those ridiculous mortgages “on faith” or out of a complete lack of personal responsibility. We need to STOP selecting one or another of the various groups of guilty parties to flog, and get ON with the solution-making.
You know what, I’m really damned impressed with the level of discussion in just these first few comments. Kudos to all of you for thinking and finding a way to think out loud in a smart way. I’m a little humbled now.
I believe that the US financial system is dynamically unstable. There are several interactions which lead to the instability.
First, banks frequently hold stock of other banks as part of business deals. This can lead to a domino effect when a bank fails and reduces the assets of other banks. Banks should not include other bank stock as part of its covering assets.
Second, the accounting rules for bank mortgage asset bundles are valued at current market values (Mark-to-Market). When one bank is in distress and sells assets at cut rates, then all banks instantaneously lose asset value. Using a rolling average over a reasonable period (6 months – 2 years) would avoid this interaction.
Third, the credit rating companies wheel tremendous power. If a bank becomes distressed, an untimely shift in the credit rating is instant doom. The credit rating companies need better over site.
Forth, Fannie Mae & Freddie Mac were much too large and are semi-private companies / semi-government institutions before the government overtook them. This means that they were big, stupid, politically correct, not able to fail. They should be replaced with several private companies of limited size and intelligent over site.
I believe that if changes to the financial system were implemented which made the system inherently stable, then the purposed $700billion could be used ease the current credit gridlock and would show a net gain on return when the housing market rebounds. However, if the instability of the system is not addressed the $700billion is pure folly.
If we the people (through our government) become the proud partial stakeholders in all of these companies doesn’t that take us a giant leap toward socialism?
The 700 billion is just the downpayment. Once we are stakeholders we will need oversight and a plan to divest the government of it’s stake. That will cost billions more.
I would be the first to admit that my understanding of economics is limited but my understanding of the constitution is solid. This feels wrong on many levels not the least of which is the principal of free trade without goverment interference. A founding principal of our nation. You remember the tea party and all that?
While I am not pleased by the prospect of working until I am 93 I am also not sure of the wisdom of giving 700 billion to folks who mismanaged all that has come their way thus far. This doesn’t create jobs or help people keep their homes, this is designed to maintain the status quo. A status quo which from my position as a public servant dealing with people’s financial lives by the hundreds, pretty much sucked anyway.
The 700 billion could be better spent and should be better spent on the American people directly without making these companies the middlemen.
Stepping off the soapbox now.
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