Sunday, September 28, 2008

Bail Out, Schmail Out

It is not our government's place to bail out these financial institutions. And I am a firm believer that the only reason that Bush and Co. want to do it is because they don't want Americans to feel the full impact of this situatuon while the current administration is in office. This could actually seal the deal for the Democrats.

If these guys ok the bail out and then the new administration takes over, the failure of the bail out will be blamed on the new administration. Especially if Obama wins the election, they will point to his lack of experience.

But the problem goes deeper. When the government gets involved and does these bail outs they enable problems like this to develop in the first place. If the executives know that they can be bailed out if they screw things up then there is no risk of failure. And if there is no risk of failure, then there is no motivation to make the right decisions. There are consequences to poor decisions and when we face those consequences and accept the responsibility for them, then we grow and get better at making decisions.

I am of the opinion that Congress has been looking the other way regarding this country's debt issues because these bad policies made it look like we had a strong economy. People were buying houses, cars, appliances, etc. that they couldn't afford and the credit card companies were encouraging them to do it. So, the illusion of a strong economy is one less issue to deal with. The gamble this administration took was that they were hoping that it would crash next year, after they had exited.

There is an interview by Sara Palin with Katie Curic where Sara indicates that the government must act and do something. When Katie asked about helping the homeowners being foreclosed on, Sara said that she didn't believe that "people should be rewarded for bad decisions." So I guess financial institutions aren't people to Sara Palin.

I'm still wondering exactly what did Bush mean when he said this would be an era of accountability?


Cathy said...

He damned sure wasn't talking about himself being held accountable. He should be ushered out of the white house in handcuffs in my opinion but that day will never come.

I would be more than happy to suffer the consequences of not bailing the fools out.

It would be worth it just to know that there is such a thing as karma and people really do pay for bad behavior.

Instead, they will get the help they need. They will feel very little discomfort for the mess the economy is in and the rest of us will suffer higher interest rates and stricter credit policies.

We are going to go from people who could get credit on a whim to people who will be held to unreasonable standards before they can get credit. Some deserve that, some don't.

Those that don't deserve it should not have to pay for the mistakes of others.

I'm not a believer in credit. I don't own a credit card. I've purchased two things on credit in the last five years. My home and my new floors.

God forbid I have an emergency and have to borrow against the equity in my home. I'm one of those who deserves to be able to borrow if I need to but will end up paying for someone else's bad decisions. And that angers me to no end.

SunWolf said...

This bailout thing bothers me, too. I'm glad that the Democrats at least made sure that there would be oversight (not just giving Paulson the blank check Bush wanted to give him), and that the Dems insisted on limiting the "golden parachutes" for execs who run companies into the ground. I don't agree with the House Republican's idea that the same bad actors should get further tax cuts...all while increasing the burden on ordinary taxpayers.

Thing is, although I have a pretty good grasp of economics, I am not an expert. I don't know enough to be able to suggest just what we should do. According to the economists, we have to do something, but not what Bush recommended.

I agree with you, GFT, that, if Obama gets elected (and I pray that he will), he will have a very difficult four years ahead of him.

I just want the election to get over with! I can't stand the stress.

I have not checked my investments. I am sick at the thought.

SunWolf said...

Oh, and Cathy, I meant to congratulate you on not having any credit card debt. That is VERY impressive, and something I am striving for. You inspire me.

Amy said...

I saw the CEO of WaMu is walking away with $18 million. Forget the fact that he only was on the job for 3 weeks. If he had any decency, he would give it back, to all the people who are going to lose their jobs. My father in law was an exec in a bank in Chicago, that got bought over last year by Bank of America. He apparently got out just in time.

A Girl From Texas said...

This scenario is absolutely disgusting.