No. It treats the symptom, not the cause. The cause was the assumption that housing values would never go down. As long as most young Americans remain too strapped to afford a house, that problem's not getting fixed. If I had $700 B to play with, I'd use it to forgive the nation's student loans. If the younger generation had that boost to their cash flow, housing prices would start rising again, and then maybe not so much of the bad paper would be under water.
No way! Absolutely not!! We have seen the CEO/Worker wage ratio increase from 24/1 in 1965 to 431/1 by 2004(yes you read that right!) If you had applied the same wage ratio increase in the minimum wage just since the late 80's till now, the lowest paid woker would make about $23/hr.
I hear the sqealing from all you Fat Cats that we would be uncompetitive in the world marketplace. Maybe we would in the short term. But you see, the rest of the world would see the in equality in wages and demand the same. Zero sum gain eventually. We are already seeing this occur in China and India. We will we go after bending the worker over over the barrel in Africa to get the lowest wage to pad CEO pay? Mars??
The average US worker has been royally messed with by the Washingtonians that have worked in concert with Wall Street to impede the middle class. This has occurred with an administration and congress that had for the most part viewed it self as moral and right; full of family values. Hurumph!
I say, take the $700 BILLION and invest it properly in infrastructure. In re-tooling our existing workforce with 21st century knowledge to increase productivity ( as though we weren't already at the top of the heap worldwide.) Invest in electrical transmission efficiency gains to reduce foreign energy dependency. Increase transportation efficiency with more modern rail, road, bridge and automotive improvements. Yes again reducing foreign energy needs. Next, mend our health care system. Too many have to worry needlessly that their health care needs will be taken care of. This will allow people to again increase worker efficiency even more as they will not have to concern themselves about whether taking care of thir health needs will bankrupt them.
Finally, give the average Joe a wage increase as he/she has worked so hard to give the Fat Cats their wage increases over the years.
Yes and no. I think the idea of handing $700 billion over to Wall Street after they screwed up is preposterous, and they should be trying to figure out this mess. However, the government should be held responsible to some point since they didn't intervene or regulate sooner, and there's no one else at this point who can pull us all out of this. The idea that government bailout/intervention/whatever is leading socialism is ridiculous. Action is needed now.
The Wall Street bailout is just as much a Main Street bailout but it has not been framed that way.
Pensions, 401k's, student loans, car loans, mortgages, lines of credit for small businesses to make payroll and credit on that personal "credit card" all runs through Wall St.
A responsible bailout that is really an investment that yields positive returns is required, especially if America is to be able to continue borrowing $2 billion per DAY from other countries in the form of them buying debt.
Americans don't seem to understand that their country functions each day ONLY because other countries, like China, are LENDING it money.
A crisis in confidence in America's ability to repay means that your "credit card" is frozen and you can't borrow any more.
That leads to a few things:
(1) You can't keep running a country with a big hole in the budget
(2) Financial institutions find it harder to borrow money to then lend to main street
(3) Unemployment goes up because small businesses can't make payroll without lines of credit
(4) The holiday season which the retail industry, and America, a country that is more than 70% dependent on consumer spending, is the WORST EVER, leading to more layoffs and NEGATIVE GDP growth
(5) People cashing out 401ks to live on while laid off have way less money thanks to a tanking stock market due to the crisis in confidence
The bill would limit CEO compensation and that is welcome. It also adds the regulation that the Republicans removed and decry.
Finally, it forces the American people, the banks and the politicians to confront the underlying problem: Poor risk management due to greedy bankers.
Risk management is the most important thing at a bank and when you can sell on risk to investors and only make money on loan origination, you do it like Countrywide - like there is no tomorrow.
Home values need to be closer 3x income, not 10x income. They also need to reinstate usury laws on credit card companies.
Finally, they need to force re-negotiation of current mortgages in order to make payments affordable for the short-term - 100 year mortgages could do the trick since the house will be sold long before that and values will eventually start climbing at the appropriate pace.
Bailing out Wall Street is bailing out America, not fat cat CEOs. What sense is it to cut off your nose to spite your face?
Perhaps a bail out of the Federal Reserve by the Feds is at center in the debate. Amassing monies laundered on pork barrel spending, ear marking, the lobbyist-payoff cycles, a cushy pensioning system for congress and affiliated corporate "members", etc...to fill the holes created by a deregulated market (federated!) is a more honest, fair bail out for America.
First, I think that there needs to be a massive overhaul on the language that everyone is using on this issue. The popular media had been relentless in branding this a "bailout" - it is not a bailout - is is truly an economic stabilization plan. This is to put the concrete foundation under our sagging economic floor.
Also, what is being proposed is a purchase of assets - just like you purchase a business for its assets. The assets that are being offered are the Residential Mortgage Backed Securities (RMBS). These are, in and of themselves, not a bad "bond-like" packages of residential mortgages. Many of the packages do include foreclosed mortgages - but the ratio of the individual "bad" mortgages in each overall package is so small, that to call the RMBS's "bad" is like calling an entire truckload of, say, manufactured widgets "bad" because one or two widgets in the entire shipment are defective.
Think of this more as investing (using our $700B) in high yield bonds. Because that is what it is.
However, if the holders of those bonds can't liquidate them, they have no money to move their companies in new directions.
We're buying a basket of assets from these investment companies, and somewhere deep inside of the basket approximately 2% of the goods are defective.
Without a market to liquidate these assets, the companies that hold them cannot continue to make capital markets function. The capital markets function because the money moves. Without the movement of money, nothing happens. We must have that happening again.
The recent defeat of the bailout bill is a more fair representation of a public voice on the matter. The kind of transparency and community organizing ideals Obama speaks to is at the heart of the free-market/regulation nightmare. A collection of core regulation communities, if organized to create and steer fair policies (based on real needs, sustainable growth, and balance of powers), is a way of leapfrogging both muddling through and fleece jobs we have seen and stood by one too many times.
No. Never. Banks are private organisations making private decisions for the benefit of the share holders. Let the shareholders pay and let the savers sue the shareholders for taking too many risks with the savers money!
no way they are playing with big boy toys & stuffing it up for the rest of the world! time to learn their lesson, they have stuffed it up for us, why should we be the ones that help them out? they owe us!
how can one of the richest countries in the world live with themselves? Its almost like they deserve to be a struggling country! they dont appreciate anything so its rightfully been taken away from them, taking the rest of the world with them! How does America believe they have the right to play God? It hasnt worked for them ever, what makes them think its going to work now? How much strife have they caused over the years of revolution!? Time to get a new plan of attack about America's future! The rest of the world needs to stand on their own two feet too! A new attitude needs to be developed & it has to work!
12 Total
September 29, 2008 at 8:06pm by Anne Nolan
No. It treats the symptom, not the cause. The cause was the assumption that housing values would never go down. As long as most young Americans remain too strapped to afford a house, that problem's not getting fixed. If I had $700 B to play with, I'd use it to forgive the nation's student loans. If the younger generation had that boost to their cash flow, housing prices would start rising again, and then maybe not so much of the bad paper would be under water.
September 30, 2008 at 4:43am by Mark Cady Jr
No way! Absolutely not!! We have seen the CEO/Worker wage ratio increase from 24/1 in 1965 to 431/1 by 2004(yes you read that right!) If you had applied the same wage ratio increase in the minimum wage just since the late 80's till now, the lowest paid woker would make about $23/hr.
I hear the sqealing from all you Fat Cats that we would be uncompetitive in the world marketplace. Maybe we would in the short term. But you see, the rest of the world would see the in equality in wages and demand the same. Zero sum gain eventually. We are already seeing this occur in China and India. We will we go after bending the worker over over the barrel in Africa to get the lowest wage to pad CEO pay? Mars??
The average US worker has been royally messed with by the Washingtonians that have worked in concert with Wall Street to impede the middle class. This has occurred with an administration and congress that had for the most part viewed it self as moral and right; full of family values. Hurumph!
I say, take the $700 BILLION and invest it properly in infrastructure. In re-tooling our existing workforce with 21st century knowledge to increase productivity ( as though we weren't already at the top of the heap worldwide.) Invest in electrical transmission efficiency gains to reduce foreign energy dependency. Increase transportation efficiency with more modern rail, road, bridge and automotive improvements. Yes again reducing foreign energy needs. Next, mend our health care system. Too many have to worry needlessly that their health care needs will be taken care of. This will allow people to again increase worker efficiency even more as they will not have to concern themselves about whether taking care of thir health needs will bankrupt them.
Finally, give the average Joe a wage increase as he/she has worked so hard to give the Fat Cats their wage increases over the years.
September 30, 2008 at 10:08am by Rachel King
Yes and no. I think the idea of handing $700 billion over to Wall Street after they screwed up is preposterous, and they should be trying to figure out this mess. However, the government should be held responsible to some point since they didn't intervene or regulate sooner, and there's no one else at this point who can pull us all out of this. The idea that government bailout/intervention/whatever is leading socialism is ridiculous. Action is needed now.
September 30, 2008 at 10:10am by David Mullings
The Wall Street bailout is just as much a Main Street bailout but it has not been framed that way.
Pensions, 401k's, student loans, car loans, mortgages, lines of credit for small businesses to make payroll and credit on that personal "credit card" all runs through Wall St.
A responsible bailout that is really an investment that yields positive returns is required, especially if America is to be able to continue borrowing $2 billion per DAY from other countries in the form of them buying debt.
Americans don't seem to understand that their country functions each day ONLY because other countries, like China, are LENDING it money.
A crisis in confidence in America's ability to repay means that your "credit card" is frozen and you can't borrow any more.
That leads to a few things:
(1) You can't keep running a country with a big hole in the budget
(2) Financial institutions find it harder to borrow money to then lend to main street
(3) Unemployment goes up because small businesses can't make payroll without lines of credit
(4) The holiday season which the retail industry, and America, a country that is more than 70% dependent on consumer spending, is the WORST EVER, leading to more layoffs and NEGATIVE GDP growth
(5) People cashing out 401ks to live on while laid off have way less money thanks to a tanking stock market due to the crisis in confidence
The bill would limit CEO compensation and that is welcome. It also adds the regulation that the Republicans removed and decry.
Finally, it forces the American people, the banks and the politicians to confront the underlying problem: Poor risk management due to greedy bankers.
Risk management is the most important thing at a bank and when you can sell on risk to investors and only make money on loan origination, you do it like Countrywide - like there is no tomorrow.
Home values need to be closer 3x income, not 10x income. They also need to reinstate usury laws on credit card companies.
Finally, they need to force re-negotiation of current mortgages in order to make payments affordable for the short-term - 100 year mortgages could do the trick since the house will be sold long before that and values will eventually start climbing at the appropriate pace.
Bailing out Wall Street is bailing out America, not fat cat CEOs. What sense is it to cut off your nose to spite your face?
September 30, 2008 at 11:17am by Bailey King
Perhaps a bail out of the Federal Reserve by the Feds is at center in the debate. Amassing monies laundered on pork barrel spending, ear marking, the lobbyist-payoff cycles, a cushy pensioning system for congress and affiliated corporate "members", etc...to fill the holes created by a deregulated market (federated!) is a more honest, fair bail out for America.
September 30, 2008 at 11:34am by Stephanie George
First, I think that there needs to be a massive overhaul on the language that everyone is using on this issue. The popular media had been relentless in branding this a "bailout" - it is not a bailout - is is truly an economic stabilization plan. This is to put the concrete foundation under our sagging economic floor.
Also, what is being proposed is a purchase of assets - just like you purchase a business for its assets. The assets that are being offered are the Residential Mortgage Backed Securities (RMBS). These are, in and of themselves, not a bad "bond-like" packages of residential mortgages. Many of the packages do include foreclosed mortgages - but the ratio of the individual "bad" mortgages in each overall package is so small, that to call the RMBS's "bad" is like calling an entire truckload of, say, manufactured widgets "bad" because one or two widgets in the entire shipment are defective.
Think of this more as investing (using our $700B) in high yield bonds. Because that is what it is.
However, if the holders of those bonds can't liquidate them, they have no money to move their companies in new directions.
We're buying a basket of assets from these investment companies, and somewhere deep inside of the basket approximately 2% of the goods are defective.
Without a market to liquidate these assets, the companies that hold them cannot continue to make capital markets function. The capital markets function because the money moves. Without the movement of money, nothing happens. We must have that happening again.
September 30, 2008 at 5:32pm by Bailey King
The recent defeat of the bailout bill is a more fair representation of a public voice on the matter. The kind of transparency and community organizing ideals Obama speaks to is at the heart of the free-market/regulation nightmare. A collection of core regulation communities, if organized to create and steer fair policies (based on real needs, sustainable growth, and balance of powers), is a way of leapfrogging both muddling through and fleece jobs we have seen and stood by one too many times.
October 1, 2008 at 2:20am by Mary Meaden
Not in its present form
October 1, 2008 at 3:37am by Ben Drury
No. Never. Banks are private organisations making private decisions for the benefit of the share holders. Let the shareholders pay and let the savers sue the shareholders for taking too many risks with the savers money!
October 10, 2008 at 4:37am by Deee Deee
no way they are playing with big boy toys & stuffing it up for the rest of the world! time to learn their lesson, they have stuffed it up for us, why should we be the ones that help them out? they owe us!
October 10, 2008 at 4:39am by Deee Deee
they play with money like its priceless, yet there are countries that struggle just to get by each day! Common that ego has to go
October 10, 2008 at 4:43am by Deee Deee
how can one of the richest countries in the world live with themselves? Its almost like they deserve to be a struggling country! they dont appreciate anything so its rightfully been taken away from them, taking the rest of the world with them! How does America believe they have the right to play God? It hasnt worked for them ever, what makes them think its going to work now? How much strife have they caused over the years of revolution!? Time to get a new plan of attack about America's future! The rest of the world needs to stand on their own two feet too! A new attitude needs to be developed & it has to work!