Welcome into another peek into my life. These are trying and unsure times for all of us.
I hate to sound like a broken record, but this week was (again) all about the economy. In a vote of 228-205, the House failed to pass a $700 billion bailout plan. Immediately following this default, the Dow fell 777 points, the third-biggest drop since WWII. It didn't take long for fists to fly with the Republicans blaming Speaker Pelosi's pre-vote speech; the Democrats blamed the dozen or so Republicans who rescinded their votes last minute. They are expected to revisit the bill as early as tomorrow, after the Rosh Hashanah holiday. All this is just on the tails of the Presidential debate last Friday, and it will surely be a hot topic at the upcoming Vice Presidential debate Thursday night at 9pm EDT.
So, the bailout was rejected, and the DOW tumbled 777 points. Is it the end of the world as we know it? Let's take a closer look at the bailout. What are the pros and cons? How did we get here? Who is to blame? And, most importantly, what do you think?
My personal (non financial expert) opinion: If you don't have much money, you probably haven't lost much. If you have a bunch of money, you might have lost a bunch. Of course, as always, the middle class not to mention people with HIV and AIDS will be hurt the most from this crisis. They are already struggling, and bailout or no bailout, the middle class and those on public assistance stand to pay the greatest price. But, that's just my opinion, and I'm no financial expert.
Understanding the Bailout
The proposed legislation would authorize Treasury Secretary Henry M. Paulson Jr. to initiate what is likely to become the biggest government bailout in U.S. history, allowing him to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates.
Kucinich on Why Bailout Should Not Be Rushed...
Through my work with various organizations and clinical trial study, I've heard lots of phony stories. Much of the country's political and economic leadership has been running around raising the prospect of the Great Depression and a breakdown in the banking system (I actually had taken the latter seriously). These stories are absolutely not true. There is no plausible scenario under which the no bailout scenario gives us a Great Depression. There is a more plausible scenario (but highly unlikely) that the bailout will give us a Great Depression. There is no way that the failure to do a bailout will lead to more than a very brief failure of the financial system. We will not lose our modern system of payments.
I cannot identify a single good reason to do the bailout.
I'm being asked two big questions about this thing: (1) Was it really necessary? (2) Shouldn't Dems have tossed the whole Paulson approach out the window and done something completely different?
Paul Krugman on Countdown with Keith Olbermann after the House Rejection of Bailout:
So. That's what some of the experts think? What do you think? Drop me an email and let me know.