Catholic Citizen

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A Bailout No One Wants Except Wall St. Corporations

“I suspect that part of what we’re seeing in the freezing up of lending markets is strategic behavior on the part of big financial players who stand to benefit from the bailout,” said David K. Levine, an economist at Washington University in St. Louis, who studies liquidity constraints and game theory.

It becomes clear that no one on either side in the Congress wants to do this bailout.  In fact, Bernanke, Paulson and Bush seem to be the only ones who do want it in Washington.  Corporations on Wall Street want it because it would give them that much more capital with which to gamble on derivitives.

I am not an economist – just an ordinary worker (in the tech industry).  But from what I see, hear and read, this proposed bailout seems to be a solution in search of a problem.  Yes, the economy is struggling, but still growing slowly.  Confidence in the dollar would no doubt be alot stronger if Washington and Wall Street showed even the slightest interest in fiscal responsibility.  We see in the rest of the world alot of interest in moving to another currency beside the American dollar globally.  I have seen indications that if that were to happen, the dollar would lose about 90% of its value.

We do have Americans who are in trouble, often through their own doing, such as taking on a mortgage they cannot afford, substantial credit card debt, and other indications of irresponsible budgetary activity, just like the federal government.  Nevertheless, there are indications by those in the industry who claim it costs the economy a quarter of a million dollars per household when mortgages go bad.  So, apparently, it would be in the interest of us all to reduce the number of families who are losing their homes.

Does the corporate bailout Wall St. favors do anything for these families?  Not that I know of.  In fact, from what I understand, the most likely scenario is that the bailout would be used by corporations to make more bad mortgage loans.  What’s to prevent it?  Certainly nothing in the original administration proposal to Congress.

So, can we agree that a legitimate use of at least a portion of that $700 billion would be to implement some sort of mortgage relief for a certain group of American families in trouble?  Then why aren’t the Congress and administration working on something of that nature?  What other problems do we have in the economy in which relief or assistance from the feds would make a difference to the taxpayers?  Employment is one; how about a program to jumpstart “green” industry and create jobs?

I am sure there are other instances in our society where assistance could be directed to those having the problem, addressing the actual issues needing assistance, rather than a handout to Wall Street so they can continue “business as usual.”  How long will it be before they need another bailout?

Neither of the Presidential candidates from the dominant parties or either party in the Congress seem to have a problem with the corporate bailout of Wall Street in principal.  There just seems to be details that need to be hammered out until this is a done deal.

And exactly what is the problem they are addressing again?  Banks going bankrupt?  That’s what happens when bad business decisions are made.  Other banks who can do business better will certainly take their place.  Why would we not allow those businesses that have earned bankruptcy by the way they do business go the way of Lehman Brothers, and let Wall Street sort itself out?  The mess will be cleaned up by those causing the problem.

No corporate bailouts!

Issue of currency should be lodged with the government and be protected from
domination by Wall Street. We are opposed to…provisions [which] would
place our currency and credit system in private hands. – Theodore


September 7, 2008 Posted by | Uncategorized | Leave a comment