Photo: freemarketmyass [Flickr], at a protest against the bailout in Chicago
So. Today, the House of Representatives said no to the Mother of All Bailouts™ (with the majority of the Democrats voted for it, and the majority of Republicans voted against it). The Dow dropped like a rock, falling 777 points, making it the worst single-day point loss ever. Democrats blamed Republicans, Republicans blamed Democrats. Oh, and Citigroup gobbled up Wachovia and the Fed pumped $330 billion into the market anyway.
I went to lunch with my lovely wife and had a delicious Korean BBQ meal. I paid cash and left a generous tip to the nice waiter. Then I went back to work, and now, I'm typing up this post.
My point is this: Wall Street may be burning (and the New York economy is undoubtedly going to take a lickin') but I doubt it'll take the rest of the country down with it, despite the all doom-and-gloom we've been told. Most of the people I talked to don't have the same sense of urgency that Wall Street and the politicians have, or wanted us to have.
The economy in general has been kind of sucky - business is down (and we've made adjustments to cope with it), but that has been the way it is for a long time - well, before the hulaballoo at Wall Street.
I live within my means, own a house we can afford, pay cash for most of my purchases. We save for a rainy day. And I worked my butt off every day for all of this - I don't think the Wall Street meltdown or a Super Bailout is going to affect us all that much.
But I may be wrong. So let me ask your opinion: what do you think of the bailout failure and what it may mean to you? Are you fearful for your economic future? Is it because of the failure of the bailout or something far more fundamental?
Burning down the house: What Caused Our Economic Crisis?
http://www.youtube.com/watch?v=F0Dy1jAXnIw
The people who will be hit the hardest right away, and for a long time to come, are the pensioners, the ones who just retired, are retiring, or are retiring soon. A huge chunk of their savings, their future, the comfort they had hoped for for so long, just went up in smoke.
These are the people who had been stuffing cash into the system for years, the people who had been keeping the system going. These are the people who thought the bubble would be their "rainy day".
Well, this is their bubble. This is their "rainy day". And it's blowing through like a hurricane off the Gulf of Mexico.
For those who are still earning and saving, feel for them.
Tomorrow, it will be you.
So how did we get here?
Subprime mortgages? Bad debt? Easy money? Where did they come from?
Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam (C-span footage)
http://www.youtube.com/watch?v=_MGT_cSi7Rs
Fannie Mae CEO calling Obama and the Dems the "Family" and "Conscience" of Fannie Mae (C-span footage)
http://www.youtube.com/watch?v=usvG-s_Ssb0
Time Warner who contributed over $300,000 to Barack Obama's campaign has already tried to force a takedown of the following video that just over the weekend had jumped from 200,000 to over 1,000,000 hits. But people are reposting it and reposting it.
Burning down the house: What Caused Our Economic Crisis?
http://www.youtube.com/watch?v=TxgSubmiGt8
As for those out there who would be thrilled to see Wall St. go belly up, please think deeper. Wall st. IS Main St. There are a lot of jobs, a lot of families, a lot of homes, a lot of lives at stake in this disaster, this well-engineered disaster, and not just white-collar ones. These companies finance other companies, manufacturing companies, even green companies. Lehman Bros. was a big backer of Al Gore's green projects. If you look more closely at who were financed by, and who in turn financed these Big Bad Wolves of Wall St., you'll find lots of companies from both camps, and many - if not most - who couldn't give a damn about Hatfield-McCoy politics, who will suffer tremendously from all this.
And for what? So the Dems could champion "affordable housing" without getting their political hands dirty by raising taxes. Subprime mortgages and easy credit was their Camelot. They forced lenders to issue subprime loans to people who couldn't afford to pay, and they championed easy credit to anyone who wanted them but mostly to those financially ill-equipped to play the money game.
For years, the Dems have consistently propped up Fannie Mae and Freddie Mac as "The Untouchables". They're still propping it up and will keep propping it up until the blood becomes just too overwhelming to ignore.
That's what I suspected. So the rationale for using our taxpayer money for a bailout of these acknowledged risks is.... what, exactly? Anyone?
The lastest codewords I've heard used now are along the lines of "an infusion of confidence" in the market. Well, shoot, I'll bequeath you all confidence. I'll give the markets a friendly chuck on the chin and tell them to buck up, little camper. Tell them grey skies gonna clear up. Sing Hallelujah c'mon get happy. But do not expect the American public to pay dime one for so much as a motivational poster to put on the wall when there was a bill proposed with explicitly no oversight on $700 billion to ameliorate private debt on admitted risk that most of us prudently refused to buy into the the first place.