Do the Bailout Changes Mean the Financial Crisis Is Getting Worse?

Defect spending is not the answer....

Noteworthy comment from Robert Harris, "Does Rome's fate await the US?," Sunday Mail, October 12, 2003:

"Might Washington, like Rome, fall victim to imperial overstretch? Could military force abroad eventually have to be withdrawn because of bankruptcy at home? Might the whole idea of America eventually be challenged and destroyed by some charismatic new faith: some fundamentalist variant on Christianity? Or will nature disrupt America's new world order?"

Maybe it's best to purge and start anew so we don't end up like the Roman Empire, European Imperialism, Industrial Revolution...and ahhh the spend-happy 20th Century. Why try to fix (or I should say throw MORE money) at what can't be fixed. The auto industry's struggle is nothing new. Give them a bailout and they'll stand in line, like AIG, and ask for more.

The new American Enterprise....Privatize Profits / Socialize Losses. So sad.

Changes??

HEY!!! WAIT A MINUTE. LET'S TAKE A REAL GOOD LOOK AT WHAT HAPPENED AND WORK OUR WAY BACKWARDS TO THE SOLUTION. COOLER HEADS MUST PREVAIL SO WISDOM CAN BEGIN TO RESOLVE THE PROBLEM. WASN'T IT THE HOUSING MARKET THAT STARTED THIS DOWNWARD SPIRAL? SOMETHING MUST BE DONE TO STOP THE BLEEDING IN THE HOUSING MARKET. FIX THE ARM LOANS AND KEEP THE PEOPLE THAT STILL HAVE THEIR HOMES IN THEIR HOMES. THEN FIX THE INSTITUTIONS THAT MAKE LOANS TO THE PEOPLE THAT WANT TO BUY THE AVAILABLE HOMES. THEN WORK ON GETTING PEOPLE BACK TO WORK SO THEY WILL HAVE MONEY TO SPEND ON THE NECESSITIES AND LUXURIES TO RESTART THIS ECONOMIC ENGINE. REMEMBER IT WAS SOME REALLY SMART PEOPLE THAT FELL VICTIM TO GREED THAT STARTED THIS DILEMMA AND THEY SHOULD NOT DISAPPEAR UNBLEMISHED. IT WILL TAKE SOME EVEN SMARTER AND WISER PEOPLE TO FIX IT, IF THEY REALLY WANT TO FIX IT? WE NOW HAVE A LEADER IN THE PRESIDENT ELECT BARACK OBAMA THAT CAN INSPIRE THE PEOPLE. NOW WE NEED SOME LEADERS WITH INTEGRITY TO ACT ON BEHALF OF THE PEOPLE. LET'S GET MOVING PEOPLE!!

bailout

TO TALK ABOUT WHAT SHOULD OR SHOULD NOT HAVE HAPPEN IS NOT IMPORTANT AT THIS TIME. wHAT CAN BE DONE TO HELP FIX THE PROBLEMS? WHERE WERE ALL OF THESE PEOPLE WHO THINK THEY HAVE THE ANSWERS? WHY DIDN'T YOU STEP IN AND HELP OUT? PRESIDENT BUSH NEEDED YOU THAN. HIS PARTY HAD CONTROL OF THE HOUSE MAYBE WE DO NOT LIKE THE BAILOUT BUT, MILLIONS OF PEOPLE ARE IN TROUBLE AND IT'S NOT THEIR FAULT. DO WE LET THEM DOWN? I THINK NOT.

Let it be

This bailout is a vicious circle of one mistake after the other, not the solution. These corporate death stars must be permitted to fadeout so the market can recycle itself and move forward. After all it’s their own fall, for lacking accountability and an accrued orthodox accounting system as every other business out there. So let faith take care the course of these economic dinosaurs. This bailout money will bring better benefits if invest in our roads, bridges and home owners across America that cannot paid for their mortgages. Screw corporate America!

Bad Money After Good

I don't think that this quasi-nationalization of the finance and banking industry will do much good. As we have already seen, the banks are just hoarding their money, much like the rest of us, as cushions against percieved worst times to come. Therefore, Paulsons' idea that this would unfreeze the markets has not come to pass. AIG is indicative of the proverbial throwing money into the abyss. This current administration is the classic example of a day late, and a dollar (or several trillion) short. Let the market play itself out. It took years to screw everything up, they won't be able to fix it overnight no matter how much money they throw at it.

Yes and no

What the changes mean to me is that $700B is not going to be enough to get us out of the hole we're in. I don't think things are necessarily getting worse, but rather that the magnitude of the crisis simply continues to seep out. The fact that Paulson now wants to move from buying troubled assets / mortgages to pumping more tax-payer money into banks in the hope that they will begin lending to consumers is troubling. It demonstrates a lack of understanding as to the scope of our problems and therefore an equal lack of direction in determining a coherent approach to repair things. There should be hefty strings attached to this money - and not simply getting a stake in the borrowing institutions! If these banks continue to do whatever they want and then go belly up what good will come of we, the people, being partial owners of numerous defunct banks? It seems that the government should demand that a large percentage of any assistance given be passed through, i.e., the banks should be required to make 80%-90% of any federal money they receive immediately avaible for consumer lending. Having said this, it seems to me that the root of our problems comes down to the fact that far too much of (the health of) our economy is predicated on consumer spending. As we have now found out it is simply unsustainable. When average people are getting second and third loans against their homes or more credit cards in order to maintain the spending they achieved by maxing out their previous cards this is the only possible outcome.

I don't think we really know

It's a sign that the program is not working as intended so they are trying something else. That doesn't necessarily mean matters are getting worse but they certainly are not getting better.