Now, it may bore some that I'm paying so much attention to this thing, but it's kind of cool that we're going through something that will be remembered for a long, long time. I'm talkin an entire chapter of a text book important.
My quick, knee jerk reaction is that the government is moving way too fast on this this bailout. It seems to me it's merely a "plugging the hole in a rotting dam" solution to this crisis. It addresses the fallout, but doesn't get at the root of the issues. At least that's acccording to the experts:
But almost 200 academic economists -- who aren't paid by the institutions that could directly benefit from the plan but who also may not have recent practical experience in the markets -- have signed a petition organized by a University of Chicago professor objecting to the plan on the grounds that it could create perverse incentives, that it is too vague and that its long-run effects are unclear. ...
"There is a kind of suggestion in the Paulson proposal that if only we provide enough money to financial markets, this problem will disappear," said Joseph Stiglitz, a Nobel Prize-winning economist. "But that does nothing to address the fundamental problem of bleeding foreclosures and the holes in the balance sheets of banks."
Henry Paulson, you worry me.
The feeling I get is that this plan is the quick fix answer, and more time is needed to thoroughly plan out just how we're going to recover. And frankly, it appears to me as if it's getting rushed simply because people are fearful of an economic downturn. Well, guess what people, we're in the midst of a full fledged downturn. Why is everyone afraid to embrace it. Everyone seems so fearful of acknowledging the word "recession", even though it's a natural occurence in the system we call capitalism.
Instead though, the powers that be within this country feel the answer is to nationalize everything when a disaster strikes this country. I read an interesting piece, from of all people, the governor of South Carolina, Mark Sanford. He cites the examples of Hurricane Katrina, when the federal government took on roles normally reserved for state and local governments. and 9/11, when the government created a shoe removal/security service by the name of The Transportation Security Agency. And wouldn't you know, my guy Sanford elaborates even more:
For 200 years, the "business model" in our country has rested on a simple fact: that while one may reap rewards from taking risks, one should also be prepared to face the consequences of those risks. Some of the proposed actions with regard to the credit market turn that business model on its head -- absolving those who took too much risk, or bought too much house, from the weight of their own choices. If Congress passes the proposed bailout, we will be destined to have far greater problems in time, leaving those who are prudent in their finances to foot the bill for those who are not.
See, capitalism relies on recessions. Japan went through one the entire 1990s. Just open up your minds to the concept of it. It's happening. So let's take the time to allow the experts to create fundamentally sound and real solutions to this crisis.
And frankly, it bothers me that one of our Presidential candidates went from saying the fundamentals of our economy are sound a week ago to feeling the need to call off his campaign because the financial situation was so dire seemingly a few days later. John McCain, you've been warned.
John McCain becoming more and more frightening.