In what was labeled a must do or risk serious financial consequences, the Republicans have voted 228 - 205 against the 700 billion bailout bill. Congress seems to have listened to the opinions of people in their districts. They were getting calls and emails in waves, saying this was bailing out Wall Street ballers for their own mistakes and games.
I was undecided. On one hand, I agree that CEOs shouldn’t get a dime in this package. They were going to get ‘limited’ compensation. Why should they be paid by the public?
And if the financial problems stem from bad mortgages, why not stop the bleeding at the source? Give the people who are having problems paying off their mortgages the chance to restructure or help to pay off what they owe. The way the bill is structured, the current mess on the books gets cleaned up in spots, but there is nothing to stop the flow of new debt from rushing in to cause the same problems.
Help people along with the mortgages and the lenders won’t have to worry about collecting on the debt. The fat cats will then be satisfied and willing to continue spreading paper wealth and all is well. That’s an idealistic view, but how about a 60/40 split for the folks?
On the other hand, to simply think of it in terms of a, b, and c is wrong. The complexity of the financial system is more like spaghetti: you’ve got the plain tips of a single noodle on opposite sides of your plate, but you don’t see all the twists and turns under marinara and meatballs it takes to get to the other side. [I’ll be teaching economics at 4 PM on the corner of Myrtle and Broadway.]
There is another way to think about this. Maybe we have to bottom out - hard - before new ways (through mergers and consolidation) and the remaining viable ways of doing business rise to the top.
As I write this the stock market has dropped 620 points.
*Edit - It closed down 778*
To think that politicians may have listened to angry callers to determine how to vote on this is scary. Do you really believe Joe Next Door neighbor knows how money flows in the system? A few Republicans suggested that Barney Frank, the Democrat leading the reform of this bill, had hurt their feelings in some way, so they voted against it. Others were turned off by the additions of oversight added to the bill. Unbelievable.
I hope they did the right thing or we will all be eating jelly sandwiches for dinner.
.. that thin of a layer of goodness too. *not my picture *