Paulson plan and the Democrats
Here is an interesting reading for all of you who are following the unfolding drama in the congress over the last one week or so.
“Reseeding the housing mess” at WSJ
The article is pretty damning for the Democrats if true. Yes an image has been painted in the media that the Republicans were the reason why the plan was not finalized on Thursday when it was so close. And maybe, as was insinuated, John McCain suspended his campaign and went to Washington solely to derail the Democrat-drafted Paulson Plan
But frankly, if as a result, the final plan that now comes out is free of pork and bone-headed funding for community organizations that helped create the mortgage mess in the first place, than I think the Republicans and McCain have indeed done a great service to this nation and the globe.
Barack Obama has extensive ties with ACORN, having done legal work for the group as well as ‘community organizing’ for its affiliates.
I understand a bailout is necessary. But if I, a taxpayer, is going to fund the bailout, then I demand that any profits that may be realized is used to repay the taxpayers, either by retiring public debt, or by paying dividends to the tax payers. I do not agree with democrats, that their lobbying friends have the first claim on these profits.
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The mortgage crisis is just the first symptom. The whole US (and world) economic system is collapsing, because its principles are based on infinite growth, which is completely insane in a world of limited resources.
It’s not the Republicans or Democrats who are to blame. We’re all to blame for being so short-term focused that we fail to see that it goes beyond one or the other side. It’s a big, structural problem and neither candidate can save the US (or the world) from what is to come.
There is simply no money for it.
Bas’s last blog post..Reading!
Sometimes I wish the bailout would not happen, simply so we would crash and get it over with sooner. This bailout is pretty much a band-aid, that will help the rich a lot, going with the ideal of the money trickling down to the middle/lower class. Unfortunately, the bailout will only help us (middle/lower class) for a short period, and then we are right back where we are right now only worse off because we had more time to accumulate debt.
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@Bas, I agree that there needs to be a long term restructuring of the economy and resetting of expectations. One of the parallels that can be drawn from the 1929 depression is that both occured when the street was drunk with excesses in the market. In this case, too much money was floating around in various sectors and people were buying assets for the wrong reason. Still, I do not think that the situation is as dire. We live in a global economy today and it is more likely now than ever that cheap assets will not remain cheap for long.
@cbspolyworks, letting the crash come is a fairly attractive option as it would cleanse the system once and for all. The resultant recovery will be V shaped and fast and if you survive the crash, you will do really well when the economy recovers. The problem is that no one has the appetite for the depth of misery that the crash will unleash on the regular folks in this country and potentially globally. Furthermore, our elected officials will not have it happen in an election year
The way I see this is that the bailout is occuring sufficiently late in the game and that has allowed weaker players and the companies with unsustainable business models to die. A big part of the restructuring that needs to occur is already occuring. I do not know if the bailout will work but I am comfortable in my belief that this is not an attempt to protect the rich, it is more of an attempt to jump start the main street economy. I can say this because as an entrepreneur, I have seen the credit markets literally dry up even for very credit worthy companies. And small businesses are where most of the jobs are being created in this country. If the small businesses suffer than the economy will really tank. I hope this piece of legislation works as intended