The Fed: A Bad Game of Clue(less).
November 13, 2008 by Godfather
Ok, what is the deal anyway?
In September Paulson was the man with a plan. Matter of fact, he basically scared the $^#@! out of everyone saying if they didn’t do what he wanted we were in for an economic collapse.
He said it was “urgent and necessary” to buy toxic assets (bad mortgages) – the cornerstone of his $700 billion bailout. This money must be infused into the banks (so they can lend) and not have the government take any type of ownership in the private sector.
Now that most of the first round money is spent, Paulson is making a complete 180 based on “new information” – which actually won’t be shared with anyone. We absolutely should not buy the assets and we should take ownership interest in failing companies in a variety of sectors including automobiles and consumer finance.
Some friends need money?
Are you a financial organization and want a piece of the “new and improved” bailout pie?
You would think there would be a very stringent process in place. Well, I hate to disappoint, but the application is only two pages long – just enough space to add a lot of zeros.
This is just another example of the government trying to control a free market.
I don’t like it anymore than anyone else, but the system will correct itself if you just leave it alone. Greed and overvaluation got us there – once everything settles back down we can move on. But not if we keep spending money trying to solve a greater issue.
Some companies conducted themselves irresponsibly. If they can not survive without a government handout then they should fail and let the next company in line (that did conduct themselves professionally) move up.
So this week we have a “new and improved” plan. I am not buying it. I think I will wait around for next week’s plan…or the movie.
More insulting is how the same banks needing to be bailed out still have billions set aside to pay out bonuses? What is wrong with this picture? Why are they needing taxpayer money if they have money to pay out bonuses? AND who the hell pays bonuses to its employees when their business fails?
Did I miss something in economics 101?
Lynda, the more insulting thing is a certain organization (AIG) that has requested and received a bailout, then another one, and is now looking for yet another cash infusion…….
I think the only one being insured by that company is it’s own pocketbook!
You didn’t miss anything Lynda. It is just that Economics 101 is not a required course in Washington.
There are a few banks, like Bank of America, that did not want or need the bailout money but were basically told to take it or else. In a recent 60 minutes interview it showed they recognized the rocky road of subprime and started avoiding those loans a few years back. They knew they were giving up short term profits for long term stability.
Companies that acted responsibly should come out on top. Instead the government is going to bail out the failing irresponsible companies. We are living in a messed up world right now.
Personally, I think Paulson is either unaware or worse, favoring his close ties to Wall Street. The mishandling of the bailout money could turn out to be it’s own version of Enron…..