The United States of Bailouts

Paulson made the right decision to put money into the bank's capital. This way, they (who are in the business) can work out the toubled assets, then write off the losses. The government wouldn't have a clue how to re-work the loans. This might actually work! I'll give it 6 months to start seeing a turn-around.

Is anyone surprised that your elected representatives are busy legislating actions against your will? I am in agreement with the Recall as a minimum or another Boston Tea Party. The recall target would have to be a powerful person, someone along the lines of House Speaker Pelosi or the minority whip. Essentially the underlying theme of the Boston Tea Party as I recall from History 101 was "taxation without representation". Sounds kind of like what is going on right now doesn't it? My latest theory on the change of heart/confusion on the bailout is that the new regime has been preaching an economic policy reloving around the bottom up theory. Speaker Pelosi, Obama, et all have been clamoring for another stimulus package. Most of us know that there is no cap for the bailout; only $700B increments. As one poster suggested the figure will be in multiple trillions. The inevitable problem with handing out free money to everyone is one day our treasuries will not sell. Who is going to buy paper from a bankrupt country? Perish the thought that we live to see that day. Nothing better than the most powerful country on Earth going into full anarchy. Folks, there is a reason why the largest Christian nation in the history of mankind is not in the Bible.

US autos cant go under or I will be stuck driving a used car forever.

When I was growing up in India, a regularly observable event has left an indellible mark on me. There stood, near my home a usually quiet temple frequented by the devotees. Every once in a while, a generous devotee will emerge and would be handing out as "blessed by God" goodies - usually items of food and sometimes clothes. These were devotees way of sharing whatever they could afford with those poorest people who could not afford much in life. As a child, I noticed that when the frenzy of such handouts was at its peak, many people wearing nice clothes and appearing much better off will also make a dash to collect those alms. It showed that a temporary swallowing of pride can lead to some quick gains. As we shower our goodies on people/firms who have no means left, through TARP 2008 version 1.0, I wonder how many well to do CEO's have advisors developing powerpoint slides that will make a compelling case for them to become elligible for handouts under this TARP 2008 version 1.0. There may be some CEOs who are not working hard to gain benefits under TARP 2008 version 1.0. And, if there are some of those, I wonder if they aren't delinquent for not acting in the best interest of the shareholders.

The theory not only works in a vacuum, it works in reality. Jobs will be created as the capital gets re-aligned. It will be painful, people may have to move to look for work. Some people will be out of work much longer than others. But it is only this painful because the boom portion of this business cycle was so artificially pumped up by easy credit Fed policies and deficit gov't spending. Incidently the free market did work out the Great Depression. It took over a decade, because the gov't intrusion in the market was so widespread, not to mention the boom phase, created by the Fed, was pumped up so high. The gov't intrusion included raising taxes, increasing tariffs (which raised everyone's prices, including costs of production), and gov't deficit spending. The point is, the downturn will continue until such time that the malinvested capital gets properly realigned to where the free market is demanding that it go, to more cost efficient productive ventures. Gov't can't realign it through its policies because its policies are the reason it has gotten misaligned in the first place.

Did anyone watch the evening news? It seems now that the focus of the bailout money has changed to giving OUR money to consumer loan companies. These companies will in turn take our money and loan it back to us with a healthy interest rate attached. So if I understand this correctly we are going to borrow money from ourselves and provide interest income to these companies so that the top execs can generate the capital to invest in oil speculations which in turn will drive the gas prices back up which has been the single biggest reason "commoners" have not had the spendable income to drive our economy.Oh, and by the way, we are going to do this so people can borrow money that they probably won't be able to pay back. Cool huh? And all this thought coming from just a high school education.

Extortion seems to be politically incorrect today. Today the proper term is "to big to fail". The big three along with the rest of the government bailout racketeers are busy selling you, the person who is not involved with all of their failures, a big fairy tale. Some how, you paying a bunch of extra tax so thieves, extortionists and liars can continue going on as thieves, extortionists and liars, is finacially better for you and you will greatly benefit from it? Please tell me another great fairy tale bedtime story like the one about how the 79 chrysler bailout benefitted the taxpayer. Which ones? Again, as a self employed person you give me only one option and that is to quit paying taxes. This truely does benefit me and you won't even have to tell me a fairytale bedtime story. Do we have a deal uncle Sammy?

When the productive members of society no longer feel they are able to be rewarded for their thrift and time they leave for places where they can keep the most of what they exchange for their labor and good decisions. It used to be the USA was one of their destinations. Look for an outflow of smart people. Do the Feds really still wonder why banks will not lend in spite of the threat of court ordered debt forgiveness and interest rate reduction? Why the UAW wants money to fund health benefits and compensation to their laid off that is unavailable to most of the productive workers and people are against it? The federal government even set up a different retirement plan outside of Social Security for it's employees - if the chef won't eat the food he cooked what's wrong with it? Won't be long until the immigration issue takes care of itself because opportunities will be better in Mexico than here.

WOW this has sparked a bunch of outrage. I'm glad I'm not alone in this feeling. The only way to stop this bailout madness is to stop paying taxes. Claim those 9 dependents put the extra in a credit union you have to save this and not spend.Then when tax time comes around file your 1040 with 1 dollar and you can avoid getting in trouble for not filing. Do this for a number of years then you can get an ex IRS person to settle for a whole lot less then what you owe. Time to give uncle sham a little bit of his own medicine.

-------------------------------------------- Everybody please join in on the nationwide liar contest with a 700 billion dollar give away The object of the game is to be the biggest liar an a mortgage application or to claim you can't afford your current loan The biggest liars win The government, through taxation of all taxpayers, will award the prizes Don't miss out Our new national morality is don't do good work, just lie to get ahead After all the way we got into this mess is by people who already lied on their current problem loans and greedy bankers who wanted to get rich on giving out bad loans and not doing a good job of checking that the borrowers were honest and could in fact afford to pay back the loans The game starts Friday if the bailout passes -------------------------------------------- Breaking News ! ! ! Starting Friday if the bailout passes The IRS will come knocking on your door and collect 3, 6, 9 or who knows how many thousands of dollars then walk over to your neighbor and give it to them to pay their bad mortgage Also your kids will never be able to afford to buy a house in your neighborhood because the bailout will artificially inflate prices beyond what they can afford The bad bankers that caused this have already made their get away and the government would rather tax passive citizens than prosecute those bad bankers --------------------------------------------- For those that say they can't get a loan Get off your behind and go find a good banker Borrow from another country if you have to, but leave US taxpayers out of it Here's a bailout plan Let's have the US apply for a 700 billion dollar loan from, say, Iraq We can lie on the application and never plan to pay it back --------------------------------------------- Dear Congressman, thank you for passing the bailout You saved me from a desperate situation, I was about to lose my home About 9 months ago I applied for a loan on a multi-million dollar house in Malibu Some crazy banker who said he would make a killing on the commission helped me get the loan Obviously I couldn't make the payments because I don't even have a job, but I happily moved in when the loan went through It has taken a while for the eviction to go through but now thanks to the bailout I will be able to keep the home that I have grown quite fond of My neighbor is the banker who gave me the loan. He said that he made so much commission on bad loans that he was able to pay cash for the house and congress doesn't have to worry about him since he is doing fine PS Property taxes will be due soon, could you please vote in another bailout plan for that Note I only regret that my old friends will never be able to move in nearby since real estate prices are so inflated now and will stay that way due to the bailout --------------------------------------------- Guess who's comments this is in response to: Why take advice from the idiot that got us in this mess, that the bad banker bailout is a good thing. He said he thought that bankers wouldn't be greedy and would have stockholders best interests in mind. When normal people are about 6 years old they learn about good and evil in human nature. Did he miss the boat or is he truly an idiot or just another liar The bailout is bad Here's a better idea. Cancel the bad banker bailout. Use the 700 billion dollars to build new jails. Put the criminal bankers in the jails. This gets rid of bad bankers and creates a huge boast to the economy in the form of construction work, criminal investigation work, architects and other needed jobs across the board. If money is to be taken from taxpayers, it should go to good use, not given away again to those criminal bad bankers. Ever hear the phrase "Won't Get Fooled Again" (sounds great when performed by the Who) Didn't he get rich along with the bad bankers? Is he in danger of losing his house and being out on the street? Hopefully he is a prime candidate for one of the brand new jail cells ------------------------------------------------ see coverage of Alan Greenspan's testimony on usatoday.com and yahoo/finance yesterday, where he said things like, he thought bankers would have stockholders best interests in mind, and the bailout is good In fact I looked at usatoday.com a few times yesterday: - the first writing seemed to portray him as if he was giving advice, thats the one where it said that he said the bailout was good, the headline was something like greenspan says we have a financial tsunami - the next writing changed the headline to something like greenspan was shocked and the paragraph about his feelings on the bailout was taken out of the article - the last headline was something like greenspan admits mistake My response was after the initial writing of the article that I saw It is actually very interesting if you read between the lines of that changing article yesterday and the dynamic nature of online vs printed articles. The first article came off as doom is near according to respected financial leader, I bet they got a lot of flack for that and rewrote the article, so I guess I was not alone in my reaction to it, or maybe they just changed their story as the testimony continued, I guess you'd have to correlate times of article writings and whether the testimony was still going on I really object to the bailout. I wish one of the presidential candidates would have come out against it and then I would know who to vote for. And then this comes out, an article about someone that allowed greedy bankers to do their thing and now he says, ya give those bad bankers another 700 billion dollars !!! And then insults our intelligence by saying he didn't think bankers would be greedy and that he thought they would have stockholders best interests in mind. That comes of to me as lies or stupidity therefore my comments like: - six year olds usually know about good and evil in human nature, so he should - won't get fooled again, by him, he admits his mistake in the first place, then recommends giving away more to bankers - bad bankers belong in jail, maybe including him, and shouldn't get bailout money, unless its for their jail cells I guess this stuff gets to me, I try to save and invest, then outright criminal acts ruin it, this happened before with enron when my daughter was entering college and I saw the savings for her drop ~35 percent and I made conservative moves to insure that she would be able to go to college and in doing so was forced to take the ~35 percent loss. Interesting though if you just rode it out back then the stock value fully recovered which was the case for my retirement money that I didn't have to take out back then and so it fully recovered back then You know now I almost hope we have deflation, so my cost of living at the time I retire will be down to where my retirement money value is. Almost looks like deflation is happening: stock values are down, real estate is down, gas prices are down, workers earnings may go down and lost jobs have already happened. And since I have 4 kids entering adulthood I hope house prices etc. become affordable to them I should probably post to some website, I guess I should look into that but I'm not really sure how/if to do that, I did find a site to send to congressmen and I sent in my earlier sarcasm, yet unfortunately the damage is already done, but sometimes feedback can help turn things around -------------------------------------------------

God Bless You Jason.

I really don't want to stand up for these flub-a-dubs in government, but I think they are honestly scared that we are about to fall into an economic abyss. However, they have 2 things going against them. 1. They are wealthy and can only see things through the eyes of the rich and powerful - they don't understand that trickle down economics doesn't work because the rich and powerful are too greedy and keep it all for themselves. They don't have a clue how the little guy feels about all this. 2. They study their Harvard economics and learn that the government did not step in soon enough at the start of the last Great Depression to prevent it. Well, what if that depression, like this one coming up, couldn't be prevented? What if there had been so much concentration of wealth, so much build up of debt, so many inefficiencies in an economy that functioned only to service the rich that a depression was inevitable, unavoidable, and I hate to say this, almost necessary to clean things up? So the end result is that they know that something is very very wrong but for the life of them they don't know why all their actions aren't working. So they make things up as they go along, thinking maybe the next intervention, or bailout, or government guarantee will be the one that works. But if you listen to the comments made on all the networks, you'll find that the little guy actually has a better handle on what's happening and why and what this means for the future.

Great piece, Elizabeth! A lot of pent-up frustration got released by reading this one. Perhaps the only silver lining in the coming Cat 5 storm will be the handful of gifted analysts who will continue to size things up and put into words – beautifully – what so many of us are thinking. This is one for the archives... to be read someday by a future Treasury Secretary or Federal Reserve Chairman who is writing his/her master’s thesis on how the Great Crater of 2008 could have been averted.

Why don't we as citizens contact all of our representives in DC, and inform them to stop the bail out NOW!!!! If this dosent' work, contact them a second time informing them that in 7 or 10 days, all of us will go on strike from whatever jobs we have left. No one goes back to work until they stop all of the foolishness. If you need food or clothes, go take them. The police will be gone within a few weeks. Once enough of us quit paying all of our bills, all of the states will start to go broke. I know that my state only gets income from sales tax and property tax. How are they going to collect it if none of us are working and paying bills and we are taking what we need instead of buying it? Whats next the SBOP (State Bail Out Package)????? If they gave all citizens that actually have a job and actually pay taxes some of these billions, and then put us in charge we would not be in this mess to begin with. Why keep giving billions and billions to "children"???????? Does the goverment want anthor Boston Tea Party??? Are we going to have to start burning money as fuel because it ends up worth less than a fricken Peso? Or do they want to do control everything like Hitler and Mussileni? Are they going to make us start anthor civil war as an act of mercy? Do we really need to actually Read the Constitution and understand that goverment is supposed to be For The PEOPLE not for the Bad Companys!!!!!!!!!!!!!!!!!!!!!!!! sorry for the long rant!!!!

I have been outraged from the start of this whole bailout process, but now it has gone too far. Who in the world can justify bailing out AMEX,a company who charges rates like these taken from their website: "The APR for Cash Advances is determined monthly by adding 17.99% to the Prime Rate. The APR for defaulted accounts is determined monthly by adding 23.99% to the Prime Rate." When they have taken you for all they can personally, they get the government to help them take more? Adam Smith was right, an economy left to itself, can heal itself. But government enablement turns big business into that sibling or neighbor you despise. You know the thirty year old who works maybe part-time, has the worst "luck" and parents who make more excuses than you can imagine. And Tom, who cares whether we pay these people unemployment or pay them to produce cars no one wants? With unemployment, their need for money will drive them to seek new sources of revenue. Auto employees are overpaid to begin with. Maybe they should have spent more of their time learning how to save a rainy day fund rather than helping their union demand a higher paycheck so they could have a fancier dinner. Everyone is in this mess together, it's time we all lie in the beds we made. Every, and I mean every, time the government steps in to a situation, they make it unfair to the majority. As a resident of NC, I know what happens when industries fail. What happened to our furniture and textile industries? What happens is, the prices of everything come into check and people become entrepreneuers. Which is why NC still has a thriving workforce. BTW, you might want to spend some time researching why those two industries fail to begin with, it was when our gov't changed the rules of the economic game. When are they ever going to learn to keep their hands off? Maybe when they have nothing to gain from their manipulations of the market?

You have not seen anything yet. Wait unitl our newly selected president takes office and implements his 1 trillion dollar spending plan on top of the "bail out" plan. My advice to him and the Pelosi Cronnie Congress....SPEND BABY SPEND. After all is this not the americian way to cure our problems.

So let the car manufacturers fail and put the proposed money into unemployment benefits. Let Wall Street take its losses and dump the trillion dollars back to the taxpayers. It is nuts to reward the idiot companies who dug their own graves - especially with MY money.

Why in the world would we give AIG another penny to send their execs on luxury outings to eat lobster! We need to let AIG drop dead and send the bailouts to GM, For and Chrysler. GM for one has made the decision NOT to put on an elaborate show and send its execs to LA for that auto show. Instead they will do the show in Detroit and save tons of money in the process. that way the execs can eat dinner in their own homes. To let the big three crash is criminal. Johnathon Honigman, on FOX Business, said "it's too bad that a lot of jobs will be lost but we can do without the big three". Is he a NAZI? Who's gonna build the battery and hydrogen cars of the future you moron? Save lives, bail out the big three and ask them to pay it back like Iacocca did in the seventies.

It is high time the UAW took a cut and tightened their belts like the rest of us. It is hi9gh time that ALL companies stop big bonuses for execs and do away with 2/3 of them. It's high time ALL you economic geniuses out there realize that a great majority of small businesses support the auto indrustry. It's high time we all realize that to build alternate fuel cars of the future, we will need someone who knows how to build cars in the first place....the BIG THREE!!!!!

What a great article. Just enough biting wit to help you smile as you read into what might not be too far off from our future as the United States of Bailouts.

I think the auto makers should get the bailout. They are the heart of this country, without them where would we be? Besides I think people think this is free money they are asking for. THIS IS JUST A LOAN.. THEY WILL HAVE TOO PAY THIS BACK.

Push NAFTA and free trade and bail out the companies it caused to go under. How smart is that? Free trade or buy USA, you can not be fair and have both.

The economic Whack-A-Mole must stop. During the election it seemed that small businesses were more important then the big businesses, so whose bailing out all of the "Joe the Plumbers" out there? No one.

Has to be done, no matter who was right or wrong. The problem is...there is one huge huge problem that Main Street USA has not yet felt the full implications of. The real trick here is how the Govt. moves forward and ensures all these companies are held accountable, cannot profit from this assistance and ensures the money they do get back comes with a large fee / interest comparable to what CC companies charge. Hopefully the Govt. will then use those funds to a.) pay off their debt and b.) put all "profit" into SS and medicare. It is a tough task and could turn out to be a master stroke or absolute nightmare. Let's trust it is the former.

To Comment by Steve Nov 12th, 2008 at 3:26 pm This country lost its way when it strayed from the foundations that made us what we were. Now, we aimlessly move about not knowing which direction to take and we make it up as we go. therein lies the problem. We’ve nothing to guide us. Not spiritually, not morally, and certainly not governmentally. I fear we are going to experience pain unlike any other time in our countries history. Bank on it - no pun intended. =================================================================== I agree completely with you but lets remember a few additional things. We have a huge population of people that don't want a moral code to live by. If they had one then they would have to be accountable for actions, decisions, etc. Many don't want that kind of responsibility. Secondly, we never learn from history and unfortunately because of ego and other hinderences we will never learn. Generation after generation will make the same mistakes of the past because they think they can handle it and do it better. Third, we have become inept, lazy and ineffective as a society. Look at how many company's are in trouble but the CEO and other high ranking people are getting sizable bonuses. This is greed and its considered acceptable. Besides this, it is acceptable to ignorantly blame the government for corporate problems. If you don't know why something happened and who is really responsible then you can't solve the problem.... In order for us to be a country we must define ourselves as a people. We refuse to do so because it wouldn't be politically correct. We will get out of this mess albeit it will takes at least a decade (likely to be longer). Later on in the 21st. century we'll make the same mistake again.