Posted on 09/25/2008 4:57:55 AM PDT by Obadiah
Credit Crisis: Everyone's chiming in on the financial mess, but we have yet to hear a better idea than that set out by our Treasury secretary and Fed chief. Congress should act on it without further showboating or delay.
Watching the same politicians who created this mess grill Mssrs. Paulson and Bernanke yesterday about what they intend to do about it was almost surreal.
Where, for example, does Chris Dodd, chairman of the Senate Banking Committee and the leading recipient of Fannie Mae campaign cash, get off acting so self-righteously when he and his panel were asked to move quickly on the administration's $700 billion rescue plan? "I understand speed is important," Dodd huffed, "but I'm far more interested in whether we get this right." Get this right? Who is he kidding? By now, everyone in the U.S. and beyond should know that if Connecticut's senior senator and his Democratic colleagues had "gotten it right" from the start, and if they'd fixed the problem when they had the chance, there wouldn't be a need for the crisis hearings he's now conducting.
Hubris and hypocrisy aside, it's important to recognize the legislation for what it is — a rescue, not a bailout, of the financial system. Taxpayers will not be left "holding the bag."
The government will buy these mortgage securities at 20 or 30 cents on the dollar and eventually sell them at higher prices. How much higher, and how far into the future, no one knows. But even if the government doesn't make a profit in the end, the loss will be nothing like the trillion dollars that fear mongers and doomsayers throw around.
(Excerpt) Read more at ibdeditorials.com ...
The people here arguing against a govt rescue plan and flooding their congressmen’s office phones and emails- are all prepared to lose their jobs, retirement accounts, pension funds, homes and go out on the street to sell apples. Or at least to see this happen to tens of millions of “other” Americans who “deserve” it.
At least that’s what they’ll tell you.
---Ludwig Von Mises
Paulson and Bernanke are choosing option #2.
Certain politicians are acting like spectators, their usual disguise.
Yes, I believe I have followed nearly the exact same route and come to the identical conclusion.
Thanks for the laugh this morning - I needed it.
Give me one instance where the government made any money on anything it has ever done ?
Conrail ? Nope. Resolution Trust Corp ? Nope.
Yeah, that’s a track record I’d admire - NOT !
I find it fascinating that Congress is doing so much soul-searching over spending an amount of money that they seem to no problem seeing go overseas to our enemies every year in oil purchases.
Just sayin’...
Frank, Dodd, Pelosi, Reid et. al. A bunch of socialists...throw them all out before they destroy what's left. We cannot, in good conscience just pass this mess on to our children of which I have 4 and our grandchildren. This needs to be the watershed moment it's shaping up to be and let the chips fall where they may. As for me and my house, we'd prefer legislators close to us so that we can vote them out, not insulated behind granite columns in Washington. Back to the states in my view.
Yep. And as predicted, when the final boom comes it will be worse as a result.
Stupid, just stupid.
Those who don’t learn from history...
This is a complete pipe dream. The reason that the government will buy them for 20 or 30 cents on the dollar is that that's all they're worth. (If that.) If this is such a good investment, then let all the people who feel that way buy and leave those of us who know better out of it. Right now the government folks are saying 700 Billion, but those of us who have been around for a while know that every dollar amount the government mentions in a context like this is just the down payment. I'd say, look for five trillion or about $16000 per person, man, woman, child, here in the United States. As for my selfish self, I'd like to keep my $16,000.
ML/NJ
But, having said that, I think the current bailout is a mistake. I just keep thinking of the stock market crash of 1929 and how Hoover and FDR turned a bad situation into a Great Depression by using the government to "help".
Politians created this mess? Maybe by not overseeing what the banks were up to.
Which they will eventually squander on more useless sh!t....... we don't need.....instead of paying off the current debt.
I know IBD is right but I don't trust these B@stards to do the right thing on our behalf.....I say vote all the guilty B@stards out.
ERRRRRRRR!!!!!
The Wisdom of Ludwig Von Mises (a few more pithy on-target quotes.)
NOT letting the system crash and burn will ENSURE a repeat of this fiasco a few years down the road. If speculators can be sure of a government bailout down the road, they have no incentive to stay clean. If everybody is sure there will be no bailout, the scammers will find it harder to get a contra-party to their transactions.
It's like the government policy of fighting all forest fires in the national forests. Eventually, the fuel built up to the point where fires started that COULD NOT be stopped.
Pols created this mess, yes. First, by creating in Fanny and Freddy a magnet for subprime worthless loans. Banks could write any worthless paper, and then immediately sell the note to F&F, taking away their own risk.
Second, by pushing the lunacy of the Community Redevelopment Act, and FORCING banks to write subprime crap loans to millions of folks they KNEW could never repay them.
But it didn’t matter, since they could immedialtely sell the paper to F&F.
This crisis was baked into the cake from the start. By politicians.
Because most of them simply get what is at stake here. This isn’t about rewarding greedy executives or ripping off main st. It isn’t about socialism. It is about addressing a failure of government itself that started with Clinton era people forcing banks to unworthy borrowers and continued with government’s failure to oversee the system that allowed bad debt to be sold off all over the place. If action was taken 5 years ago we would be in a much better place today. No action and the illness spread. Now the patient is dying and people want to scream for a massive colonic in order to address the problem.
I listen to the pundits and bloggers rant on and on about this stuff but for my money I want the money people who know their ass from their elbow to chime in.
One of my granddaughters was a summer intern a couple of years ago. She came home dumbfounded that 25 year olds were actually running the country.
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