We Deserve a Better Bailout
Why shell out $700 billion to the foolish financiers who led their companies into this swamp?
Why should the public get a worse deal when asked to use its dollars to help lesser-quality financial institutions that have a higher risk? The existing shareholders should be at risk, with their value extinguished or diminished, before the taxpayers are asked to bear the burden of the likelihood that the securities the financial companies hold will further decline. Otherwise, the executives who did so well on the way up will not be responsible for their losses incurred when their business decisions turned out to be flawed. The first description of the plan as a bailout was right: It would bail them out of their mistakes and pay a reward for failure. If there were profits to be made from spending money to shore up the banking system, it should be made by the taxpayers and not just by the political and financial elites who created this mess.
That is why Americans have been furious at these proposals, as they had every right to be. Congress needs to modify the way any rescue effort is executed. The outline of the new effort looks too much like the failed one, but Congress maintains oversight and the ability to influence the execution. Wall Street must be seen to bear responsibility for flawed business decisions. The role of markets to reward success and punish failure should not be undercut.
Congress should get it right the second time around—and quickly.
Reader Comments
the plan
Are you out of your cotton picking mind?
the plan
Are you out of your cotton picking mind?
Bailout
Mort,
My anger at the recovery plan falls primarily upon how Paulson tossed our tax money to the financial hounds prior to his departure from government and likely re-entery into the financial jugernaut from which he came. As he generously granted riches to his buddies near his departure, his actions, with no oversight, carried the stench of quid pro quo.
President Obama's recovery plan, however, has much to like. Health, education, infrastructor, housing, banking, etc. all play well into a sound recovery plan, which has at its core the recognition that our economy, if it is to regain its health, must be divergent.
Kevin Phillips in Wealth and Democracy argued our shift of wealth in recent decades from the working class to the investment/banking class has weakened our economy and the middle class, forcing us to shore up bankers and investors at a level and frequency we've done no other sector in recent decades.
President Obama's economic team is seeking our recovery with a multi-faceted approach, which, while hoping to strengthen our banking sector through investment and oversight, seeks, as well and intelligently, to strengthen other sectors, previously relegated to a secondary or lower tier in federal and state planning and funding, particularily in the last eight years.
You suggested during your appearance on Meet The Press (3-08)that the American public lacks trust in President Obama's plan, partially because it is so complex and it doesn't target recovery. I challenge your assumption.
A so-called recovery plan that ignores infrastructure, health costs, education, etc. is no true recovery plan. From the perspective of investors, who have nuzzled up to the golden trough, I can see where a, what's not to love recovery plan, would be feeding the beasts more of our money, no strings attached.
But if you're out here working, caught in heavy traffic, a recovery plan that helps get me to work and home more efficienty, safely and with lower pollution while providing good-paying jobs is a darned good recovery plan. If you're out here watching our children attend school in substandard buildings you would never locate your office in, I would argue President Obama has a darned good recovery plan. If you're a family that through no fault of your own saw your wealth shift to the investment class, leaving you without a job or home, I say President Obama's recovery plan is darned good plan.
The failures of the banking industry in its unfettered greed has stolen our prosperity. And we get what President Obama hopes to accomplish. You may not get it, Newt may not get it, but many of us out here do. It's not socialism or any of the hated "isms" Newt and his fellow conservatives ramble about. It is a recognition that a healthy economy is and should be complex and it is that theory which is apparently driving President Obama's recovery plan, and that is why his is a recovery plan which will breath life back into our economy.
advertisement
