I'm not opposed to the government stepping in and bailing out some of the financial giants that have gone down the past week. When your patient has gone into cardiac arrest, you need to keep the heart functioning. The financial sector is the heart of our economy.
What I object to is that there has been little effort made to provide support for Joe and Jane America who have lost their homes in this bubble burst. The benefit they will receive from this will amount to the "trickle down," which is to say that it does not exist. Those who do stand to benefit are the power brokers and uberwealthy whose decisions and actions put the economy into this mess. This is the government once more taking the side of the wealthy.
The economic effect of the bailout would have the same effect by bailing out homeowners, with the additional benefit of allowing working class homeowners to remain in their homes. This has been rejected for reasons that elude me. Discussions instead center on allowing homeowners to be thrown out of their homes, and protecting the brokers whose irresponsibility created the market crash.
From what I understand of the bailout that was rejected Monday -- and I can't imagine the one being considered now differs much in this regard -- is that it would have allowed no golden parachutes for CEO's hired after the bailout. Those who presided over the worse financial collapse in 70 years, however, still get theirs.
In other words, it still protects the wealthy malefactors while managing to screw over the little guy. What a country.
This may be how the world works, and how it always has worked, but I see no reason why we should tolerate or accept it, nor that we should facilitate it. Our government was founded to protect the people from tyranny, and that includes economic and financial tyranny as well as political. It is within the purview of the government, in granting the emergency aid, to lay down stipulations for receiving that aid. That includes "No bonus for failing."
The people who have presided over the crash of WaMu, Lehman Bros., AIG and the others are not entitled to turn a hefty profit over their greed and incompetence. The U.S. Government was, the last I knew, planning a rescue operation that would reward them personally for their failure, and then close the barn door after all the horses had left, so there would be no more golden parachutes for later failures.
I call that wrong. Anyone with me?
Copyright © 2008 by David Learn. Used with permission.