I’m not generally paranoid, but I wonder if something more sinister is up with the huge economic plan that got forced through Congress. So far, the plan hasn’t helped. The plan was to restore confidence, but there is more fear in the market than ever. It seems the more governments do in our current economic crisis, the worse it gets. Why did they think it was so critical to act immediately? Why do people who are supposedly so wedded to the principles of free market all of a sudden do an about face and support the nationalization of troubled companies? Could it be that this administration is so afraid of the elections, knowing that unless the economy quickly turns around they will not only lose the White House, but also large chunks of Congress, that they decided gamble in order to shore up things in the short-run? If that’s the case, they lost. If that’s the case, we all lost! Like I said, I’m not generally paranoid, but after Iraq, I don’t put anything past this administration. Are we to become, as Paul Theroux described the Ethiopians, "a race of aristocrats who have pawned the family silver?"
On a positive note, I hope to make another river trip tomorrow! The leaves are changing, maybe I’ll have some photos to share.
I found it kind of ironic that this economic bailout was supposed to help everything but it did nothing.
ReplyDeleteOne of the big banks they bailed out, AIG I think but I'm not sure, was being lambasted on the radio yesterday because right after they got bailed out, their CEO and all the "big wigs" went on a luxury retreat. The amount of money that they spent to go was astronomical. Makes me mad that we "helped" them out. I mean, if they have the money to go have that kind of fun, then they don't need government money.
I think you had the answer to all the questions you posed in this piece. It is an election year. Most of the experts that I read said the bailout will have little to no effect UNTIL the housing market stabilizes. I think we still have a long way to go before that happens. I'm going to google Herbert Hoover and the great depression because what little I know of it, the similarities are eerily similar.
ReplyDeleteTC - Not to apologize for AIG, all but a handful of those on that trip you described were sales reps and not bigwigs of the company. Never-the-less, I think their timing was very poor. They cancelled the second one scheduled for today.
Sage - I thought I had read that nothing would change until they use the money to start buying the bad mortgages from the companies. I'm not sure why they haven't done so once it was approved but assume the reason could be similar to depositing a check into your account. It takes about 2 weeks for it to go through the process and is then actually in your account. I'm sure they don't want to get caught bouncing any checks.
ReplyDeleteOn the contrary, I think it has nothing to do with the election. They acted for only one reason alone, to protect their own legacy, not for the love of this country (not to this country into greater debts). They are concerned about how history will view them, therefore they keep saying 'inaction' isn't tolerated. Because history, like it or not, hates inaction.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteHere's a teaser:
ReplyDeleteThe slump in automobile sales was paralleled by the decline in the construction of new housing, causing unemployment in the building trades. Fewer suburban houses meant fewer markets for appliances, wall coverings, and other activities related to home building. The economy was in trouble but people, dazzled by a surging stock market, ignored it.
Yep, that is referring to the Great Depression. Here's a good brief historical article that I found.
Look at you, Ed, dabbling in fear mongering. Just because everything is connected doesn't mean that it's headed in that direction.
ReplyDeleteIt has had a ripple effect on Asian markets too...
ReplyDeleteof the ironic thing is that some of the riches folks at Lehman Brothers made was in their company stock (This summer, they'd increased the stock portion of compensation to 65% of total. (I wonder how much of it the employees had sold prior to its collapse).
ReplyDeleteEd, I know I had some of the answers there--but there have been other housing bubbles before--even in the 80s--but they've been more regional as this one is impacting the entire country.
Murf 1: interesting analogy, it will take longer to clear things up, but the confidence that the clean-up will would should have a positive impact on the stock markets, but it hasn't had a positive impact, only a negative one.
Mother Hen: There was a funny section on The Daily Show a few weeks ago where the "expert" said that Bush was trying to secure his legancy. Jon Stewart asked what kind of legacy, to be the worst president ever and the "expect" said, "No, it's worst than that, he wants to be the last president."
Deleted Comment: We miss your voice!
Ed, interestingly, the article you quote begins talking about the increased productivity of the 20s which resulted in small increases in wages and over 60% of the profits going to the top 5%--trickle down didn't work back then either.
Murf, Ed a fear monger?
Gautami, I'm not so sure I'd call it a ripple effect--it's been more like a tidal wave on some markets (interestingly, we don't hear as much about the Indian markets as we do Japans, Chinese, Hong Kong (lately even Thailand and Australia)
TC--my first comment was to you and I started editing it, went away, and didn't realize I left the sentence all mixed up. I meant to say: One of the ironic thing is that some of the riches folks at Lehman Brothers made was in their company stock (This summer, they'd increased the stock portion of compensation to 65% of total). I wonder how much of the stock the employees had sold prior to its collapse? And if the same is true for companies like AIG (which is an insurance company, not a bank).
ReplyDeleteActually, hasn't it had no impact rather than a bad impact since it was just as bad before as it is now? Now's the time to buy stocks!
ReplyDeleteLooks to me like it's done nothing. I have a feeling they'll blame this stock market falling on our lack of confidence.
ReplyDeleteYou're not paranoid at all! I agree with everything you said. I think it was the wrong plan and it was pushed through so quickly most everyone didn't have time to know what it entailed. Now it has so many pork barrel things added, it doesn't make sense at all.
ReplyDeleteThere's no question that the elections are on everyone's mind. Yet, I'm not prepared to blame merely one side. In truth, there's plenty of blame to be shared. The problems exist because government insisted upon diddling with market years ago instead of leaving it alone.
ReplyDeleteNow, that the chickens are coming home to roost, the politicians of all stripes are fleeing their handiwork and pointing fingers. Additionally, they facilitate the panic by screaming, "the sky if falling" in order to be able to say they rode to the rescue.
Of course, in the meantime, they've taken our money, (about $10,000 per nose of those of us who pay the bills as of now) and a little bit more of our freedom, besides.
(Can you tell you pressed a button?)
:)
Cheers.
Murf, yes, now is the time to buy stocks-but only if you have excess cash. In a way, since I'm buying, having the market down is a good thing (for me but not for the country or for companies that depended on their stock prices as collateral)
ReplyDeleteRLL: I agree that confidence has a lot to do with the stock market
Kenju, things done in haste...
Sherman, I agree that there's plenty of blame to be spread around. Personnally, I think the govt in intervening at the wrong place in the market--and are only helping those at the top.
I totally agree w/Mother Hen. The minute I heard Bush touting the praises of this plan, my first thought was: 'He's trying to save his legacy.'. I so hate saying this but I seriously doubt that anything the government does anymore has to do with the best interest of the people. There's always some integrity-lacking undercurrent driving their actions/words. Wow. How's that for a loss of confidence.
ReplyDeleteI've been among some who believe that God is shaking our economy and almost every aspect of our lives to wake us up to realize that our only security is in Him.
ReplyDeleteThe Bushies have gone from pushing de-regulation, to now pushing socialization - but always to benefit the Wall Streeters, not the Main Streeters.
ReplyDeleteA little late with my comment here, but McCain was on meet the press this morning and talked about Great depression - compared todays situation to then.
ReplyDelete"A homeowner's loan corporation was instituted in the Great Depression. They went out and they bought people's mortgages, and, over time, people were able, then, to pay back those mortgages. And the Treasury actually made some money.
This Treasury in this administration is spending its time bailing out the banks. The cause of the crisis was the housing crisis, as we know. And how--home values, as long as they continue to decline, then we're not going to see a turnaround in this economy. "
from http://www.msnbc.msn.com/id/27388251/page/3/