The federal bailout plan very well may be necessary and it could work. I’m not entirely sold on it since these are the same guys that were supposedly watching our economy and regulating Wall Street, but to do nothing would be even more egregious. This plan should calm the markets and hopefully help the housing market recover which in turn could very well lift the rest of the economy with it.
What I would like to see in this plan is that not only are those corporate golden parachutes reduced, I would like to see the guys at the top of every organization involved in this debacle be fired immediately and sent packing without a dime, no parachute, no severance, no pension, no nothing; and maybe we should seize their personal assets and return them to the taxpayers. These guys were not only not earning their keep, they were playing you bet the economy and they lost, yet we’re the ones left holding the bag. Secretary Henry Paulson originally didn’t want to include conditions that might bother his friends at the head of these corporations, saying that they might not go along. Fine, then arrest them and allow them to serve a few decades for their attack on this country’s economy. Perhaps we could shoot them for treason.
Last week John McCain criticized Obama for not coming up with a plan 20 minutes after the crisis surfaced. Quite frankly, I hope everyone involved with doling out a trillion dollars takes a few minutes to think about it first. Most Americans debate if they should spend their money on a cup of coffee longer than McCain spent on his recommendation. McCain thought Obama was taking too long to come up with a plan on how to fix the largest and most complicated economy on earth. Hmmm. That kind of melt down sort of bothers me. If he’s elected he’ll have the nuclear codes. Don’t get me wrong, I’m worried about Obama too, but he did seem more poised and considered. The whole thing was more sillyness anyway since neither of them really needed to do anything at all since the crisis would be over by the time either got elected and most definitely by the time they were sworn in 3 months from now. They will need to deal with the economy and how to regulate Wall Street and Insurance and big business in general. It seems clear that after the Enron fiasco, and WorldCom, and Goldman Sachs, and potentially Detroit and a litany of problems yet to surface they will have their work cut out for them, but I believe that too must be carefully considered and planned.
If these guys had any guts at all they’d let us know who their White House staff would be, all of them. It is that staff that, together with the president, that will set policy and try to persuade congress to do their bidding. One of the big criticisms of Ronald Reagan was that he delegated too much to his staff, yet he set the tone and the vision, so these men and women that surround a president are nearly as important as the president himself.
McCain has indicated that he’s hot for Phil Gramm and there is speculation he could be tapped as treasury secretary. Gramm is likely the key guy that could be tagged as most responsible for this mess, so his involvement in a McCain administration is important to know. I worry about Obama because we don’t know who he might pick for some of these important positions and maybe they’d be just as bad.
If the markets are calmed and housing begins to recover by next spring, not only will we avoid another few million homes being foreclosed, but with improved home sales we will see more money spent on fix ups and more people going back to work and eventually construction will pick up again and we can hopefully get back to trying to grow the economy. Without such a plan the U.S. would definitely fall into a serious recession and quite possible a full blown depression. The 70s and 80s were pretty dire times for the U.S. and a good number of the elements that consipred to make that time what it was exist today. What we don’t have so far is rampant inflation but that could change overnight. The bottom line is, we can’t afford not to do this plan and we will do this plan. It’s too bad that there will be winners and losers and a lot of people that played by the rules and saved and paid their bills will have to stand by and watch others that made bad choices and should suffer a little as they get a pass this time. We need to do it and just suck it up even if there are some that benefit even if they should not.
I hate the fact McCain chose to rush back to Washington as if only he could save the day. It seems likely that if anything, he’s upset the negotiations and of course he missed the first six days of negotiations so he couldn’t possibly know what ground had already been covered. His presence was disruptive and for something as dire as this particular problem, his politicking is unconscionable. Senator McCain once again freaked out.
Keep in mind that a trillion dollar bailout likely won’t cost a trillion dollars since much of the money handed out will be reclaimed. Few people recall that the bailout of Chrysler actually returned a profit to the treasury. That is unlikely this time but the bottom line won’t be a trillion, likely won’t be half that, but nobody knows what the cost will ultimately be. In large part, the final cost will be determined by how successful the plan is.
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