I know the consequences of not doing it are disastrous, but what happen to the free market? What about all those funds that took short positions? What does it say about capitalism? Suppose we let this collapse what would happen? I think its time we let the markets work as they are supposed to.
Oh God no. I think it is blatant money grab from the few remaining producing States in the South and West to keep some Wall Street bankers from having to give up their house in the Hamptons. We don't have the tax money to do this bailout, and no one is stupid enough to loan us the money. We will pay for this bailout with inflation, and it will get really, really ugly. The Federal Reserve, the orchestrator of this calamity will skate through, and still won't have any oversight whenever it's done. This is nightmare for anyone who lives outside Washington and New York.
Uh...I respectfully dissent from your opinion entirely. What we saw was the beginning of a total collapse of our financial markets. The Great Depression took out a lot more than Washington and New York. People lost a lot more than just a broker's house in the Hamptons. We may not be able to afford the bailout, but we cannot afford not to either. You are potentially looking at tens of thousands of jobs lost if we allow the market to completely crumble.
They should have let these financial companies fail. It would hurt financially some rich folks, and some people would lose their jobs. The industry would be forced to adapt and innovate new ways to succeed. Instead, they will get a 2nd chance at repeating the same mistakes for short term profits.
Wrong...wrong...wrong. I would recommend opening your encyclopedia to Great Depression, The. It was a LOT more than hurting some "rich folks" and more than just some jobs were lost. We were, and possibly still are, looking at financial armageddon.
It's socialism for the rich. Screw you if you lose your job and need welfare to get by because you need to exercise a little personal responsibility but hell if you need a couple hundred billion to bail your company out of the crap it's stepped into with risky operations then we'll have the check right over.
The great depression is not happening. To put things into perspective more value was lost during the dotcom bust then will be lost in this financial mess. Heck the amount lost by shareholders of these financial companies will be more than actual money lost by them.
we don't really have a choice. but i do think all those bankers who got paid bonuses should have to return those bonuses as part of the bailout.
I support it - but it should be made clear. On the theme of Tom Friedman's column today, we're going to have to do something hard. We're going to have to suck it up and pay for it. We have already passed TRILLIONS of expenses onto future generations and eventually the piper has to be paid. It has to be now. We have to be ready to do without. To fix this thing is going to take tax raises. That's it, plain and simple. We can't let the anti-tax jihadists convince us otherwise. If we value our way of life it's the answer. And that's just the truth. I'm not a fan of tax raises, nor is anybody. I just hope that the lesson where the poor & middle class suck it up to support our way of life is not lost on people in the future. I'm sure it will be..........but.
If you think that the Great Depression happened overnight, you should probably read up on it. If the financial infrastructure of the nation crumbled into a big heap on Wall Street, all companies would be affected. Either because their stocks took a tumble as investors pulled out of the market or because their lines of credit got cut off or called in as due and payable. The job loss a few months down the road would be staggering and widespread.
I trust Krugman's judgement on this- No deal I hate to say this, but looking at the plan as leaked, I have to say no deal. Not unless Treasury explains, very clearly, why this is supposed to work, other than through having taxpayers pay premium prices for lousy assets. As I posted earlier today, it seems all too likely that a “fair price” for mortgage-related assets will still leave much of the financial sector in trouble. And there’s nothing at all in the draft that says what happens next; although I do notice that there’s nothing in the plan requiring Treasury to pay a fair market price. So is the plan to pay premium prices to the most troubled institutions? Or is the hope that restoring liquidity will magically make the problem go away? Here’s the thing: historically, financial system rescues have involved seizing the troubled institutions and guaranteeing their debts; only after that did the government try to repackage and sell their assets. The feds took over S&Ls first, protecting their depositors, then transferred their bad assets to the RTC. The Swedes took over troubled banks, again protecting their depositors, before transferring their assets to their equivalent institutions. The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world. And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving. I hope I’m wrong about this. But let me say it again: Treasury needs to explain why this is supposed to work — not try to panic Congress into giving it a blank check. Otherwise, no deal. http://krugman.blogs.nytimes.com/2008/09/20/no-deal/
You have no idea what was coming here. You'd have bank runs that would have caused a significant portion of the banks in this country to be gone. Pension funds destroyed. Retirement savings wiped out. There would be virtually no home loans available, meaning home prices would plummet at incredible rates because there would be no buyers. The losses to the shareholders of the financial companies are such a tiny, irrelevant component to what would be come without the bailout.
I do know what will happen. It will be a collapse of a lot of companies. People will make a run on banks like wamu, but I think BAC, WFC, and JPM will be ok. If people can't afford to buy houses won't buy them. Houses in San Jose are still a minimum of 700k, that needs to come down significantly. It would be a bitter pill to swallow. A lot of people will lose jobs. A lot of talking heads will panic. The stock market will crash. I got plenty of cash to buy stuff, and 0 debt. I would be buying stuff left and right and you know what in a few years the market will hopefully fix itself. 90% of people will still have jobs.
OK. Let's assume that is true. Is this $1,000,000,000,000 (I know they say it's only $700,000,000, but a bunch of estimates put it at over $1,000,000,000,000) spent in the best way? Again, all I can see is a continuation of the status quo when the status quo got us here. If we're going to spend that much, we need to change the system and change the assumptions we currently have. $1,000,000,000,000 would be much better spent reforming health care, improving our infrastructure, and investing in science and tech than on this pile of crap... and it would probably make America stronger in the long run. Again, I'm not against some form of assistance to the financial sector, but this current proposal is obscene, undemocratic, and unAmerican. And Major, given the flurry of lobbying already taking place, I assume you've come around to the conclusion that the pretense of putting politics aside is now officially dead.
I firmly believe without it, we end up in a recession and maybe a depression. While I don't like it, I agree we need a serious cleanup and new firm regulations in place to stop it from happening again. DD
Recession's already here, whether the numbers agree or not. You can tell by the number of houses on the market, the dearth of new jobs, the closed up shops. I don't disagree we need something, but giving this administration the ability to spend $700,000,000,000 without any oversight is not the way to go... and if that is what is needed to preserve the current system, then that's a big clue that the current system is screwed up beyond repair.
Very predictable. When you see people saying "they should have let them fail", what they really mean to say is, "I don't care that hundreds of thousands of people will lose their jobs and homes, and that the American public would suffer a LOT more than the fat cats on Wall Street I display self-righteous indignation against. I have plenty of cash and I'll make it through OK, and I don't care what happens to everyone else."
Krugman is not the guy you want to listen to here - he's an economist. Please read my post from the other thread where I completely pwn3d Mr Krugman - Krugman doesn't know what he's talking about here http://bbs.clutchfans.net/showpost.php?p=3906734&postcount=50
geez....It is always surprise to see how people underestimate the importance of the financial industry. By the end of day, if the whole system crashes, rich ppl on wall street will just down grade from farrari to BMW, while the people on main street will lose everything, from their houses down to their jobs. tax payers money? top 20% earner pays 80% of the tax anyway, so what is the problem here ? the way I see it, the average americans are getting a great deal, after all, their reckless borrowing and house flipping created this problem at the first place. But with the bail out, a lot of them are saved from bankruptcy.
