Posted By RichC on September 24, 2008
It is a frightening time to be an American family and businessperson, as the credit markets in the United States dry up and near collapse. Our elected politicians posture in Washington DC in hopes to prevent a slide into a deep recession or possible depression. President Bush request time to address citizens on Wednesday night and currently is recommending a $700 billion rescue plan, along with Treasury Secretary Paulson and Fed Chairman Bernanke. At the surface it looks to be a bailout for Wall Street banks who have make poor decisions, but encompasses much more.
I was doing a bit of reading on this move to socialize the banking and finance industry in order to salvage our economy; without a rescue effort credit markets will dry up, IRAs, 401Ks and homes … and in turn the economy … will suffer even more than most of us have ever experienced. As if this boondoggle wasn’t bad enough, congress seems to be looking for a way to politically play games and a way to point fingers at others. If there was a time for some unity in Washington DC it would be now; everybody will be paying for this bailout. By the time a bill is packaged up it is going to make our ‘pass along’ debt to the next generation even that much larger; about the only positive is that “maybe” some of the proposed $700 billion investment/infusion/risky loan money will come back as the economy rebounds? It is definitely not a ‘good’ investment but may not end up costing the full $700 billion, still the alternative is that without government intervention the U.S. economy will truly tank and take our citizens with it.
Senator McCain has decided postpone his campaign for President and decided to go back to work in Washington DC and is even backing out of the first debate to be held on Friday. Senator Obama believe he can do both and “at this moment” has decided not to take a campaign recess and return to Washington; the Friday debate is in question and perhaps will be just a campaign appearance by Obama?
Personally I’m already tired of the finger-pointing and blaming the “fatcats” on Wall Street. There is enough blame to go around and few can claim that they didn’t see something coming or didn’t contribute to this. Almost ‘all’ are guilty — including Obama ($22 million) and McCain ($20 million) who gladly took money from these ill-managed Wall Street firms. I say ‘all’ because its not just those who oversee the greed on Wall Street (politicians, appointees, board members or hire executives) , but also the millions of common people buying homes they can’t afford, buying on easy credit or refinancing their consumer debts and rolling it into homes with excessive valuation (home equity lines of credit). From the appraisers selected by local mortgage companies to those local and national lenders working on volume rather than margins when loaning money; so as long as they can pass these questionable loans along to Wall Street it was business as usual. Eventually this sub-prime nightmare was going to “come home to roost” as Obama’s spiritual advisor Reverend Wright would say. This crisis threatens all but the most savvy citizen … those sitting on a gold mine or oil reserves perhaps? If we weren’t in a recession, we are now — so hold to your hats because this salvage effort by the federal government is not going to be pretty.
A final thought as we approach November … this isn’t the time to be raising taxes or increasing spending (something even the ‘tax and spent’ liberal Democrats are rethinking … at least Obama) and is a time to unify behind a recession ending push by our government. Markets need to stabilize at ‘some’ level and companies need to have access to capital in order keep Americans employed. Commonsense dictates that making political hay and adding pork to a rescue bill deserves to be punished by voters — if congress does not, we need to chuck those who add their personal pet pork and bring in some new blood to look out for the best interest of the country and its ordinary citizens. Let’s hope congress does their job and can come to some kind of plan … no one is really going to like it.