Bush Wants Bailout McCain Says Screw Them
September 21, 2008
Bush wants OK to spend $700B - Sep. 20, 2008
NEW YORK (CNNMoney.com) — President Bush asked Congress on Saturday for the authority to spend as much as $700 billion to purchase troubled mortgage assets and contain the financial crisis.
McCain says Fed should stop government bailouts - Yahoo! News
GREEN BAY, Wis. - Republican John McCain said Friday the Federal Reserve needs to stop bailing out failed financial institutions. The Republican presidential hopeful said the Fed should get back to “its core business of responsibly managing our money supply and inflation” and he laid out several recommendations for stabilizing markets in the financial crisis that has rocked Wall Street and commanded the dialogue in the presidential campaign.
For the first time, I might actually be agreeing with W. Bailing out these companies is a must. Left to their own devices they will fail. That wouldn’t be a bad thing until you look at the assets they do have and will leverage to stay afloat as long as possible. As this won’t have a direct affect on McCain and most of his cronies, they don’t understand or care just how bad it will hurt everyone else immediately. They don’t even seem to understand or believe the long term consequences will affect them and their ability to live with their heads in the clouds, such in the state of neoconservative elitism.
The first things these financial giants will do to stay afloat left to their own devices is raise the rates on every adjustable rate product they have just as quickly as they can, including the ones issued to good paying middle income people. They know they are already going down, so they will have no compunction about raising rates above where people can pay their bills, so long as they pay their mortgages. They are right too, most people people will do their best, possibly defaulting on other debt, to save their homes. If the feds fail to help these mortgage giants, they will bankrupt the middle class as well.
It won’t stop there either. Bankrupting even 10% of the middle class will cause a cascade in the financial markets that the rich have long thought safe. Money will be pulled out of markets further reducing liquid assets and available credit to commercial interests who rely on it.
Especially hard hit will be the retail sector which relies on that available credit to pay its employees all year long. Hardest hit will be Wal-Mart the single largest private employer in the country. While I have no love for the company there failure is one of my worst economic nightmares. They are popular because their lower end goods are most often sold at a loss with profits only being made on store branded products and top tiered middle class goods like electronics and housewares. Failure of the middle class means those products will no longer sell. Being the largest employer and sole retail outlet in many small towns means their failure equates to the doom of these small towns so cleverly bought out.
In the end $700 billion is a drop in the bucket compared to what will happen if we do nothing. If history is any indicator, if our economy collapses we can expect between 20 and 40% unemployment that covers the strata from those fresh out of high school and college to those with years of experience and multiple doctorates. You can expect homelessness to jump to unprecedented levels. Along with homelessness you get rampant outbreaks of disease, skyrocketing crime rates, and decaying family life. The welfare payments alone will quickly out pace that $700 billion. Failure to bailout these companies simply turns us into another broke ass third world ex-super power.
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Comments
6 Responses to “Bush Wants Bailout McCain Says Screw Them”
Got something to say?
I’m one of those independent voters who votes for the ethical candidate, regardless of party lines.
I too, believe in the Republic and upholding the Constitution.
Let’s pull our money out of the markets and get this over with.
On your marks, get set, GOOOO!!!!!
Unless you have the money to lose now is certainly not the best time to be in the market for a lot of people. The best investment I think a person who has the money to invest right now could possible make would be going to these midwest sheriff’s sales where $150K to $250K homes that are foreclosed on are selling for $30k to $70k. I saw one three bedroom home in a nice neighborhood with good schools sell for $22k, it needed some work after it sat vacant for more than a year but the homes around it are still selling at $120k. I cringed at not having any money to invest.
I think McCain is taking this view because he knows Bush would have already bailed these companies out by the time he comes to power (if he does). It is hard to ignore such large financial institutions going under.
Interestingly today the Federal Reserve owns more of the financial institutions than USSR did in its peak. So is Bush following the communist mindset?
And hey Brad how come your world is tiny. I find it so big and hard to navigate
Whatever financial package we put in place should only give enough money to cover them through March. By then we will have a new president for and a new congress that doesn’t have this crap hanging over their heads at election time. There are simply too many reactionaries in both parties for us to proceed as quickly as possible.
In spite the bailout is passed, yet markets are not taking it. Still worldwide index going down. While Bush’s says it will take time that bailout will effect positively, so be patient. Is there any discussion seen how it is going to impact in long term…
@az@debt management -
It will most definitely take time to turn things around, but the important thing is to keep some of these huge companies from immediate failure. No one in politics talked about the market slide, because any of them that could see the writing on the walls knew it would be highly unpopular. I think what we are seeing in the worldwide indexes is the reaction to the truth, change, real change is going to be forced on the US banks and mega-corporations.
The unfortunate thing right now is no one has the political initiative to take the important next step and start the legislative process to start that change. It will all be done with the next congress and president. While securing funds to keep these companies from going under was important right now, I hope they will take the time to consider the long term effects of further actions.