I am very pro capitalist and when I first heard about Paulson’s plan I was angry, shocked and dismayed. I’m still angry about how we got into this mess. Please, don’t waste your time leaving me a comment blaming Bush or free markets. That’s not what caused this mess and anyone who’s done any research knows it.
Right now I don’t trust the Democrats or the Republicans. I don’t care what any of them say, they’re all being partisan while bragging about their bi-partisanship. It’s disgraceful. They should go with Paulson’s plan. They shouldn’t add to it, change it or put requirements on it. Congressmen are not economists. If they had any idea how the economy really worked they would have different jobs.
As pointed out by Larry Kudlow, this isn’t the first time government has stepped in to aid a troubled economy and it probably won’t be the last.
This is similar to the Resolution Trust Corp. story 20 years ago, when Bill Seidman presided over similar asset sales from bankrupt S&Ls and wound up making money for Uncle Sam and his taxpayers. A long prosperity wave followed. Read full article.
The time for hysteria is over. It’s time for those we put in office to step up, bite the bullet and do the right thing for the first time in their lives.
Once this is over, perhaps John McCain can explain to the American people that we can prevent this sort of thing from happening in the future by living within our means. Perhaps the American people can look in the mirror and see their own culpability in this situation. If so, maybe we’ll all learn something.
I have spent the last few weeks watching this unfold glued in front of the big screen and CNBC. Unfortuantely, Dishtv does not carry Fox Business News so I cannot get a second opinion. From time to time, I flip to Bloomberg, and their analysis is even gloomier. (is that word?)
My opinion is the projected plan was nothing more than another hail mary by Bernake and Paulson. They told us when we gave them $200 bn for Freddie and Fannie that would solve the problem, that all the bad debt would go away and it would free up the markets. Didn’t they say that when they bailed out Bear Stearns for $35 bn?
There is no plan. They have no idea how to execute the idea. It is just that an idea. The democrats saw a big problem with their plan when phone calls and emails started pouring in. Running 9-1 against from the populus. Isn’t this a government for the people?
Do not take my comments to be directed at you, I am merely pointing out things which I believe are important.
In typical fashion, the democrats announced the deal was done in an effort to stop McCain from getting involved. What they failed to mention was the leading Republican, Senator Shelby had not been in any of the meeting yesterday, he boycotted them. As usual, political theater by the democrats to hoodwink the their ignorant base. No, not all democrats are ignorant, but, but, well, I will let that go.
The Republican counter offer makes sense, insure the debt at a premium. That gives cover to institution loaning money to the troubled banking institutions which included brand new U.S. banks, Goldman Sachs and Morgan Stanley, and Bank of America/Merrill Lynch.
The seizure of Washington Mutual was correct. While a disaster for shareholders and unsecured debt holders the plan works. It was how the government works. Step in take over troubled federally chartered U.S. banks and protect the customers.
If the U.S. Treasury and Federal Reserve had stood their ground and let Goldman and Morgan go down, someone would have bought the assets. Freddie and Fannie are a different issue, but the idea of physical punishment for the triad of Clinton, Johnson and Raines seems to be in order. Maybe a trip to the woodshed and seizure of assets.
My plan is to allow federally insured banks to be seized when they are close to default, then sell the assets for a profit. The shareholders are wiped out but the taxpayer does suffer. Investment banks are highly leveraged risk takers and if they error, then they pay the price.
Current illiquidity issues are from banks not being willing to loan to suspect banks. Once their is insurance on troubled assets that goes away. But keep it at the Federally insured bank level and kick Goldman and Morgan out or force them to sell off Investment bank operations.
For the democrats fear has set in. If they pass the legislation, without Republican support, in 6 weeks they will be back hat in hand for more money and the people will revolt.
Good post, and we need a continuing dialogue on this until it’s settled. No more, here’s the plan now shut up and vote for it. We are the people and we have a right to voice our opinions and for them to be heard and represented. That process is being played out.
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WE SHOULD ALL KNOW BY THIS TIME THAT “BIPARTISAN” MEANS DEMS TAKE A STAND, AND REPS CAVE IN.
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Z-They’re already trying to add billions more to the package. And of course, not a soul is holding them accountable. My local paper has yet to mention the Community Reinvestment Act.
SA-I agree that the govt shouldn’t be in the business of bailing out Wall Street, but it’s the govt that caused all of this. Paulson’s plan is risky….but the alternative? Anyway, we’ll see what happens later after the GOP has their input.
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