BAIL WHO OUT?

For several days now the proposed bailout of Wall Street has been rolling around in my head like a pea in a bottle. Admittedly it is a huge problem that needs to be dealt with by groups of people with a whole hell of a lot more education in economics than I have, but a few thoughts keep popping up in my mind like corks caught in an eddy.

The first is that, while I don’t consider myself a great thinker, I do believe that George W. Bush is even less of one, and he’s the guy who is proclaiming an immediate bailout to be essential. When George W. Bush says acting in a certain way to handle a situation he says is critical, my instinct is to holler “Stop!! I’m not following you over any more cliffs.”

The second is that we are being given no distinctions about whom we are bailing out and what their situation is. All we hear is it’s going to take $700 billion dollars to bail out Wall Street. What? Every investment broker on the street is broke? Is no firm on Wall Street in a good position? Or is it just that if the public tap is going to opened everybody on the street wants to be a recipient of the largesse?

The third is that what we are being asked to do is to throw more weak money after bad. The looming crash is looming because BushCo insisted on killing all the regulations and disarming the regulators. Now they want to inject the biggest sum of money ever promised (to be raised by selling weak securities backed by our tax pledges) into that same bloated, under-regulated mess. To top it off, Bush even refuses to take away the perks of the CEOs he himself defined as his base!!!

The fourth is that the bailout only serves to buoy up the jerks that set everybody up with mortgages they couldn’t possibly pay off in the first place. What about the poor saps like you and me who bought into the American dream and believed those great minds that kept acting as if housing markets always raise their values 10 to 20% a year? What happens to them? Why doesn’t the government want to refinance their mortgages at lower values, but reasonable rates that would allow current owners to keep their rental units or remain in their homes and, if they do so long enough, to regain the position they were in the day they got the original loan? To hell with promises that some day we might get our money back from our investment in Wall Street. We ought to know by now that a snowball in hell would have a better chance.

My ultimate conclusion is that W’s deal stinks. It does nothing for the little guy, but seeks to bail the high rollers out at the little guy’s expense. What should be done is to engineer a government bailout for the citizens who have already suffered from Wall Street’s greed. Devalue the assets and offer discounted mortgages to the homeowners and see how many take the deal. If it lets the Wall Street CEOs go under like the lead hearted sinkers they are, so much the better. Their successors might then understand why they will not be allowed to operate without regulatory oversight.

Maybe then American citizens could feel safe in their homes.

This blog is going to my representatives as a letter this morning. Please consider sending something similar to yours. Here's an easy way to do it: http://congressorg.capwiz.com/congressorg/mailapp/

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