I called my mom today because I hadn't heard from her in a while, and I figured that the middle of either "the biggest economic collapse in Western history" or "just another market correction" seemed like a fine time to do it.
Chicken Little would be proud of Secretary Paulson and Chairman Bernenke for their scare tactics. Markets respond emotionally, not rationally (anyone who says otherwise is ignorant, and furthermore ignorant of the work we did at Webmind, which was continued after by at least three other companies, into market prediction based on news). Whipping up fear in the marketplace is exactly what these leaders of the financial world should not be doing. But they are, because they're trying to get nearly a trillion dollars of Federal money granted to their good buddies on Wall Street with no oversight and no accountability. They can't justify that if they don't throw a few extra buckets of feces into the fanblades and really get the markets going haywire. You just gotta respect that kind of chutzpah. If I tried to squeeze even seven hundred dollars out of you for my friends, with some cockamaime line about the end of the world if you didn't pay up, I'd be busted for extortion.
I believe that the country is in some financial trouble, but I certainly don't think another handout to the Wall Street megacorporations will fix it. These kinds of bailouts encourage willful creation of future sketchy financial instruments because the BSDs know that they won't be held accountable. If John Q. Taxpayer will foot the bill while those who created this mess sail away on their million dollar yachts to their private islands, what is to prevent a recurrence? Furthermore, how can our country rail against the irresponsible poor, such as alleged "Welfare Queens" (yes, I'm still stuck in the Reagan Years, but apparently so is the whole country), while giving giant corporations bail-outs whenever their dubious schemes to fleece their customers blow-up in their faces?
These mortgages were designed to deliberately fail, because no professional investor could possibly have believed in even medium-term stability for financial instruments whose value was based on the idea that someone who couldn't afford the loan in the first place would keep-up with ever ballooning payments. Each in-the-know institution simply hoped they weren't caught holding the bag as they passed around this debt. Perhaps the debt-holders hoped (prayed?) that somehow when (not if) these borrowers, who the institutions helped manipulate into overextending themselves financially, started defaulting that home prices wouldn't crash and they'd get to double-dip and resell the houses at full value. If they did, they should have their M.B.A.s rescinded. I don't even have a B.A. and I'm not quite that stupid.
Unless those people are held accountable for their unethical, perhaps fraudulent acts, in the same legislation as the bailout package, I absolutely do not support it. Furthermore, I am not inclined towards supporting the package unless it includes some proviso for both the treasury being reimbursed (which the new package that was defeated seemed to), salary caps at effected companies (also there), and specified penalties for this kind of wrongdoing both now and in the future (since, after all, this is just a larger repeat of the S&L crisis). I'm not interested in we the taxpayer merely buying a few more years until the next bailout.
If the conservatives want free market forces to play out, then no bailout at all, even with these considerations, is the path to take. Such a course of action wouldn't have caused global calamity if Bush and Paulson weren't rampaging through the media saying it will, making traders, bankers and financiers even more nervous. What would have happened is what was happening: weak banks would collapse, and stronger ones would buy them. The market would recess, and eventually recover. During this process, a lot of people would be screwed. I can't say I support that, but it didn't need to be portrayed as a self-fulfilling cataclysm.
Where we are now, it seems some kind of bailout has become necessary, thanks to the media frenzy stirred-up by the pseudo-conservatives in the Bush administration (like Bush himself). If that is the case, the terms should be as strict as possible, and civil and criminal action against those responsible should follow.