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Call your Congressman/Senator and tell them what you think about the $700 billion bailout No matter what you think, you should call your local Congressman and your state's two Senators and tell them what you think. Contact information for the US Senate. Contact information for the US House of Representatives. Do yourself a favor and only call YOUR Senators and your ONE Congressman. Don't call Ron Paul unless you live in his district in Texas. Don't call Obama unless you live in Illinois. Now...for my opinion: You know what will happen if we spend the $700,000,000,000 to buy all those worthless mortgages? Supposedly credit will be easier to get. But wasn't that the problem in the first place? Wasn't the problem that people were taking out mortages on houses that they couldn't afford, so they could live above their means? You know what? Maybe we should only take out credit when we are capable of paying it back. Do you really think that THIS bailout will be the one that works? We have already spent $300,000,000,000 on bailing out AIG and Fannie Mae and Freddie Mac. If we do this, we will have spent...now get ready for it: $1,000,000,000,000 to fix this fucked up economy. Oh, by the way...when we print this money to buy those worthless mortgages from Wall Street, you know what that does to your savings? It devalues it. Alluva sudden, $1 today is worth $0.90 tomorrow. If you earn $30 in interest at 5% in a year, you still are effectively losing $30 (at 10% inflation you gain $30, lose $60). And what happens if we don't do this bailout. They say that people will lose jobs. They say the economy will stop working. They say that companies won't be able to get everyday loans to keep their businesses running (does a healthy business need everyday loans to make payroll?). They say that mortgages will be more expensive unless you have perfect credit. Should we just trust them? What ever happened to those Weapons of Mass Destruction, anyway? When I call my Senators and Congressman tomorrow, I will let them know (only my Congressman is up for re-election), that if they vote for this bailout, they will be losing my vote for them. But if they were to include Sirius XM in their bailout, I will forgive them and give them my vote back.
Category: Shady Law
Posted 09/24/08 by:
sleze
CommentsGlizzle wrote:
09/25/08 13:23:13
Gliddy, continued wrote:
Oh, one more thing...
The buyout of securities might actually work. At least if we do it the right way... If we give a free pass to them (which I believe is the Bush plan), we're throwing $700B away for no return. If we do (what I believe is the Pelosi/Congressional Plan) give them a bailout, but ask for something in return (stock in their company, ownership of the MBS assets), it should work out for our long term benefit. The thinking here is...buy low (but not as low as they are now), wait for the housing market to come back (which it will, because this crap is cyclical), then sell them again, making a profit. There's no way that banks are going to offer sub-prime mortgages again, and I'm willing to bet that we're going to see an era of ULTRA risk-adverse lending practices...and I'm not convinced that's a bad thing. Everyone shouldn't be able to afford to buy a 4 bedroom house, and people that can't afford to do it shouldn't be allowed to anyway, just because banks can make a few short-term bucks off of them. Remember this in 10 years...someone is going to be very, VERY rich because of this economic turmoil. That's why our economy works...becuase it rewards people that find the opportunity in crisis. Unfortunately, Capitalism means that there are winners and losers. The trick is finding out how to be a winner.
09/25/08 13:31:30
sleze wrote:
<i>"What we've got here is a bunch of smart guys telling the guys in charge what to do."</i>
Are you talking about the smart guys that said the economy is doing just fine back in June? Surely you aren't talking about the smart guys that said the $600 rebate checks we all got were going to fix things. http://money.cnn.com/2008/0... Sorry for the snarkiness but I just don't trust Paulson or Bernake OR the Federal Reserve anymore. I agree that stocks will tank if we don't do this. I agree that people will lose jobs if we don't do this. I agree that it will be harder to get mortgages and buy cars if we don't do this. But what I DON'T believe is that this bailout will actually prevent all those things from happening either. I guess I am on the Ron Paul bandwagon. He predicted this crash like a year ago and essentially pointed out everything that is wrong with our current economy. Again, he is nutty when it comes to our interaction with the rest of the world, but he has actually been right about the negative impacts of our economy's behavior. I think he might be right in how to fix it (requiring 20% down-payments on houses and only buying things when you have the money to do so).
09/25/08 22:16:44
sleze wrote:
"Remember this in 10 years...someone is going to be very, VERY rich because of this economic turmoil. That's why our economy works...becuase it rewards people that find the opportunity in crisis."
You are absolutely right on this one. It looks like Warren Buffet is already starting to cash in with his $5 billion purchase of Goldman Sachs. It just better not be the people who started this mess in the first place.
09/26/08 08:45:39
Paul wrote:
Nope...I don't mean Paulson or Bernake...I'm still putting them in with the politicians (because that's essentially what they are). I'm talking about the economists and Warton guys that I'm betting that they have on staff figuring out how to get us out of this mess.
As for Ron Paul...he's like the new Ralph Nader, except he's actually been elected to something. Problem is, that doesn't (in my book) qualify you to be POTUS. In response to your snarkiness, I'll add some pessimism...the political system is so broken (I blame Al Gore and the internet, and John McCain and the Blackberry) that everything becomes an issue of "I'm right and he's not," we're going to end up not with a fix to this problem, but rather a band aid that might last us another 80 years, and might last us another 20. You know who's opinion I'd be interested to hear on this? OB's.
09/26/08 10:38:49
sleze wrote:
Send him the link. Maybe we should find Paulie Marino and get his take...
09/26/08 11:05:34
OB wrote:
So Gliddy called me out for my opinion on this...so here it is:
Honestly, let the darn thing tank. If you're going to blow $700 billion on something that may or may not work, I wouldn't mind being refunded my income taxes from the last 2 or 3 years to sack away under my mattress. Gliddy is exactly right that the trick to capitalism is to be a winner and not a loser...the problem is that to be a winner many times you have to lose your soul and conscience in the process. People are too smart for their own good--because to be a winner, many times you need to exploit the system and take a short cut or two. So you have a degree from Harvard?...how about some common sense? I really have to ask some of these people if they still remember how to wipe themselves... Our grandparents knew the value of hard work and a dollar, having lived through the Great Depression. We have no inkling of the concept. To us, a hard day at the office constitutes getting a phone call from some prick we don't particularly care to deal with...And how many people do we know willing to drop 5 grand a month to live in Manhattan for the experience??? There's no concept of fiscal responsibility there...I moved back home, and am damn proud of it, because I'm paying off my debts while saving money for my future...although this may relocate from RBS to my first Piggy Bank... Having spent 5 and a half years at Nova (for 2 degrees :-P), I met some privileged individuals who thought they had done something to earn the yacht and BMWs daddy bought them since he was a CPA or CEO or some other anagramed person. I can't deny that there weren't a lot of great people there...but we have all seen the effects of the greed of Wall Street on the outlook of people who are now delusional as to the fact they are not a part of Main Street. I really don't want to see anyone become homeless--that's not to say I would be upset to see some mansions become vacant, replaced by a bungalow--and I don't want to see people starving and soup kitchen lines and the sorts of the post 1929 era. However, I think that maybe there's a lesson we all need to learn...the hard way.... Unfortunately, I think that lesson will hit the poor and middle class the hardest, since we don't have much to fall back on. On the other hand, aren't we the one who gives these Wall St. people business? Aren't we the one's who elect these political morons to office? No doubt while we suffer, they will also get knocked down a few pegs....and maybe this is the lesson we all need to learn before it's too late--ask our grandparents, it could be worse.
09/26/08 13:03:27
sleze wrote:
To Paul, Gliddy and Glizzle: Although I subscribe to Ron Paul's economics, I don't think he should be president.
To OB: Thanks for your contribution. To All: What other website has such a diverse group of commentators? - A Bank Marketing Expert - A Political Scientist - A Computer Scientist Only here at http://www.thereheis.com.
09/26/08 13:43:53
OB wrote:
Although...if nothing else, if we end up bailing out Wall Street, I think that the CEOs and other executives should be prosecuted and have their earnings seized to help pay back the tax payers.
Case and point...WaMu CEO is in office 17 days, oversees the seizure of the company and billions in losses, and walks away with a cool 20 million. I wouldn't mind getting paid 1.2 million per day for 2 and a half weeks....
09/26/08 15:37:55
Paul wrote:
OK, so being somewhat pragmatic (because we all know that best case won't work here)...what's the best way to structure the bailout? Assuming that you're in control of, say, the House and Senate.
I'm a fan of not rewarding people for doing nothing...especially when I see CEO's walking away with more money than CFG's entire marketing budget, while they'd only give me 2 months severance if they were to can my sorry ass.
09/26/08 15:49:53
OB wrote:
Best way to structure the bailout? There are several points that I would say should be included. By no means are they exhaustive, and I'm sure we can all think of more. But here are 5 ideas:
1) Transparency and opening of books: Any company that receives funds for the bailouts should have to account for every penny of the federal investment and should have to make their books public. If government budgets must be published, so too then should be the budgets/books of any company receiving public money for a bail out. Democracy only works when voters are educated (look at our current mess). The same goes for the free market. Especially after such catastrophic failure, we can't be educated consumers unless we can see just what our money is being spent on after we pay a private corporation for a product. I may see that a company's CEO has spent $1 million on his wife's b-day party and decide to not use his company anymore. Isn't that my right as a consumer??? 2) Forfeiture of executive profits: A contract may give CEOs a severance package and outrageous salaries for doing nothing. But if Uncle Sam needs to provide money to a company with such contracts, Uncle Sam should have the right to seize any of this unnecessary spending as it sees fit. If you or I were to declare bankruptcy, the first thing we would have to do is get rid of unnecessary spending (ie. internet, cell phones, gym memberships). Companies "benefiting" from the bail out should have to do the same. Any bail out should not be intended to save a company--and the language must support that fact. CEOs and members of the exec boards should have to forfeit any earnings over 200,000 annually (including bonuses) - or something to that effect. This would be MORE than generous, considering that there are many people who make minimum wage, earning about 20,000 per year. Too bad if you can't keep up your standard of living and afford the best anymore. You should have thought about that before you ran these companies into the ground and had to ask for a bailout paid by the taxpayers (some of whom ironically enough are already your paying consumers). 3) Public Return - If banks are going to charge me 8% interest for the duration of the loan, we should charge them 8% interest on the bailout, until every penny is paid back. This interest can then be used to issue regular economic stimulus checks...whether it be 20 dollars or 2000. Their philosophy has been...you need money that we have...you have to pay for it. Shouldn't that work in reverse??? My taxes are supposed to go towards public programs that benefit the greater good...not keep private enterprises a float. The minute my money gets lent out rather than going for the purposes it is intended, I should see some interest. Show me the money! 4) Future government oversight: I definitely do not believe that government knows best. And big government sucks and bumbles almost everything it touches. The Post Office still sucks... However, Wall Street has proven that it can't be trusted either. In the future, there needs to be more accountability for private corporations, especially ones so integral to the economy. 3 years ago, did any consumer have any idea these banks could go bankrupt and collapse our economy? I think not... Any "integral" corporation who's failure could severely damage our economy should have to answer to federal overseers (notice not regulators). Furthermore, any company looking for tax breaks or other financial incentives should be subject to the overseers as well as making their books public. If I can't get a tax break as a law abiding citizen...I should be able to see why a private company is somehow entitled to one. 5) Selective bail out: The bail out should not be 700 billion to Wall Street to use how it sees fit. We all see how well they've done up until now. Companies saved by the bailout should be singled out and identified before the money is given. If AIG and Fannie and Freddie are necessary to save to avoid catastrophe, so be it. However, this money shouldn't be a blank check to save a poorly run business that market forces were already driving out of business. Once we save enough crucial establishments to avoid a major depression, we should allow the market to take it from there. There are plenty of small and mid-size businesses which are probably run by more scrupulous individuals who would be more than willing to fill the gap left behind.
09/26/08 16:26:59
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The problem is, the guys in charge aren't listening to them, they're listening to the guys that get them elected.
Which is making what should be a macroeconomic answer to a problem a political issue...where it's not "what will fix this," but instead "what answer can I give for this that shows I tried to make Joe American happy, so if it doesn't work, I still get elected."
The more I learn about our economy, the more terrified I am.