So is it me or is this big corporate bailout reminiscent of Reaganomics aka Trickle Down Economics aka supply side conomics, where we focus on saving rich for the supposed benefit of the middle class and poor? Obviously those who run the show, Henry Paulson, Ben Bernanke, and others didn't seem to notice the collapse of the U.S. economy until Wall Street was in deep. We also don't seem to be learning from our own history. Does anyone remember the Savings and Loan Crisis and the stock market crash of 1987?
In the 1980s Reaganomics was all the rage and it resulted in high inflation and high unemployment aka stagflation. Remember Bush has been cutting social programs left and right, and this move to save Wall Street is akin to Reagan's need to slash taxes, with the biggest reductions to those with the highest incomes. Bush has given us a high deficit, just like Reagan. We are dealing with high gas prices, just like Reagan had to deal with when he entered his Presidency.
This bailout is going to do the same thing to the economy Reaganomics did, it is going to be a rough ride. We are in a recession, whether or not the government wants to acknowledge it. No one seems to know what the hell is going on, and we need to be concerned.
16 comments:
I could not agree more. Whichever person is elected president because of Bush's failed policies they are going to have a rough first two years in office. I honestly feel for Obama if he is elected President (still voting for the man because he is our best hope) but he is going to be rode hard for policies he had nothing to do with.
Lord help us all if McCain is elected because with the stress and his frail health that means moose-meat, gun toting Palin will be running the country.
Can a sistah get a bailout on these student loans?
Didn't think so.
I remember my grand-parents talking about the S&L thing when I was kid. The TX housing market got it bad, with intrest rates on homes going into the teens. My mom got laid off from the EPA. Time were tough for everybody.
I just hope I can find a job after graduation that doesn't involve flipping burgers or folding clothes.
I think the real problem has been the lack of regulation in the market. The bailout is our problem but it isn't the biggest problem. The biggest problem (currently) is just behind us. All the people who wanted to keep up with the Joneses and all the mortgage companies whose cupidity grew too great for their good sense have screwed us all.
There are disinterested economists who say that if we don't bail out these corporations, we will be out of luck. Debt owed to people or companies is the majority of the wealth of our nation. What happens if this debt becomes worth little to nothing? If the worth of our debt drops, so does the value of our money itself.
Well, whenever I hear a negative economic story, all I have to do is change the channel to hear exactly the same news played in a positive way and vice versa. The more I learn about economics, the more I think no one really knows how it works and all economists are is glorified slots players. All they really do is pull levers on the giant machine we call the economy until something lucky happens. Then they cash out and write a book about their insights into the economy.
I will admit, I find the notion that regulation/taxation when it's in the best interest of the country is an immoral, evil and SOCIALIST attempt to drive us away from the holy free market system, but the moment anything goes wrong, you should give us money. Not nationalize like we did with Frannie Mae, Freddie Mac and AIG, but just give us money. Thanks a bunch.
Now, we're going to do this again in about ten years, so you should probably start saving up now.
I heard that John McCain's campaign manager received or receives 15,000 per month from Freddie Mac. Does anyone know if there is any validity to this?
I remember the Reagan years as being just as bad as this. I just think that the money given to bail out Wall Street should be given to those of us who are trying to make mortgage payments on our houses and praying that they don't go into foreclosure as the interest rates climb.
I just hope I can find a job after graduation that doesn't involve flipping burgers or folding clothes.
I totally understand your situation, Texasladybird. I've been unemployed for over a month and I have a Maser's degree and still can't find a job that doesn't involve working at Walmart or changing diapers. Believe me, I'm tempted to work at Walmart. Times are hard.
This shit ia drepressing on so many levels that I don't want to get started on all of them, I just can't because I don't have the time.
"I will admit, I find the notion that regulation/taxation when it's in the best interest of the country is an immoral, evil and SOCIALIST attempt to drive us away from the holy free market system, but the moment anything goes wrong, you should give us money. Not nationalize like we did with Frannie Mae, Freddie Mac and AIG, but just give us money. Thanks a bunch."
I have too completely disagree here. Free Market and the Trickle Down Effect only work in theory, but as you can see, clearly not in Practice. Why is it you ask? because in theory, human beings always do the right thing, but in practice we are inconsiderate, greedy, and just plain selfish for the most part. I wish I still had my sociology book on hand from my freshman year, but I still remember most of details from the analysis, It goes something like this, Since the 70's if you include Inflation and Purchasing Power, the Average wage of most American workers in the Middle Class has only risen something like 1 dollar per hour. Thats right, with all the advance in Technology and Science in general, the welfare of most of the people of this country has remained fairly unchanged. Well What about the Trickle Down Effect and the annual growth in GDP and all that good shit. Well just look at the paychecks of the CEOs and other board members who sign everyone elses Paycheck.
Socialism in moderation is a good thing. Actually, I think some Socialism is necessary for a society to survive, as well as a market economy. People tend to go to the Extremes of each, but a balance of both is necessary. The real challange shouldn't be control the market, regulating or deregulating it, but to make the market work for the government. I'm going to stop this shit or else I'm just gonna keep rambling on.
Personally I was shocked to learn that the Seagall Act had been repealled. When I studied Finance I read up the History of Wall street and how that act came about. One can not trust an institution to to be both a Commercial Bank and an Investment Bank. That is Financial/Economic Disater 101. And who led to the killing of the act, none other than Mr. Mental recession himseldf and student of the Marie Antoinette School of Economics, McCain Economic genius Phil Gramm.
Early on in the summer I told a friend that this whole thing was going down, I just had a terrible hunch. He said that was impossible. Now wait for the Auto Industry to head the same way.
Jazzy,
You are right, whoever takes office will be completely screwed.
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Can a sistah get a bailout on these student loans?
Me and you both, sista.
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I think the real problem has been the lack of regulation in the market. The bailout is our problem but it isn't the biggest problem. The biggest problem (currently) is just behind us. All the people who wanted to keep up with the Joneses and all the mortgage companies whose cupidity grew too great for their good sense have screwed us all.
Very true. I am so glad me and the husband bought a house that was well under half of what we were approved for. I remember looking at huge houses, and my mother looking at me crazy. She told me start small and move to bigger later. I am glad we took that advice, because now I see people struggling to keep their homes, and we have managed to stay comfortable, even with me basically not working.
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The more I learn about economics, the more I think no one really knows how it works and all economists are is glorified slots players. All they really do is pull levers on the giant machine we call the economy until something lucky happens. Then they cash out and write a book about their insights into the economy.
That is the biggest problem, they really don't know anything, but yet they act as if they do. Then if they do manage to play their cards right, they do the whole, I told you so, and write a book :)
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I heard that John McCain's campaign manager received or receives 15,000 per month from Freddie Mac. Does anyone know if there is any validity to this?
Not sure?
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I totally understand your situation, Texasladybird. I've been unemployed for over a month and I have a Maser's degree and still can't find a job that doesn't involve working at Walmart or changing diapers. Believe me, I'm tempted to work at Walmart. Times are hard.
Whoah,I thought you were a teacher, but I am not surprised, due to an oversight of 64 million by our interim superintendent, Dallas is having to lay off teachers they can't afford to lose. They already had a shortage, and now they will struggle even more. I am currently in an alternative certification program to hopefully teach special education, but I am really getting depressed about the jobs, but hey DISD calls me everyday asking me to sub, so I know they need the teachers, they just don't have the money.
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Personally I was shocked to learn that the Seagall Act had been repealled. When I studied Finance I read up the History of Wall street and how that act came about. One can not trust an institution to to be both a Commercial Bank and an Investment Bank. That is Financial/Economic Disater 101. And who led to the killing of the act, none other than Mr. Mental recession himseldf and student of the Marie Antoinette School of Economics, McCain Economic genius Phil Gramm.
Phil Gramm is a hot ass mess. I remember when he switched from Democrat to Republican, and I remember I knew how out of touch he was. He was recently walking around telling folks the American public was "whining" about the economy and how it wasn't so bad. His dumb ass would be from Texas.
Whoops, I left out a line at the end of my second paragraph, it should have said that I found this idea hypocritical and fairly offensive, instead of just saying I found that notion. Sorry for the confusion, JDR.
Very true. I am so glad me and the husband bought a house that was well under half of what we were approved for. I remember looking at huge houses, and my mother looking at me crazy. She told me start small and move to bigger later. I am glad we took that advice, because now I see people struggling to keep their homes, and we have managed to stay comfortable, even with me basically not working.
At the time when we purchased our house 4 years ago, the real estate market was great here in Georgia, but now, with interest rates jumping through the roof and people basically not able to give their houses away or realizing that their house has no value and they have to take far less than what they paid, the mortgage rates are terrible. Working as a preschool teacher is not a stable career as they are getting hit hard as well, with so many people losing their jobs and homes, then being unable to pay school tuition and having to pull their children out of school. I'd like to get into the school system, but I don't have the right degrees and they are tightening up on their teacher requirements. I have friends who are trying to get out of the public school system because the government is cutting funding and their salaries are shrinking and they need to eat so they are trying to change careers.
I'm trying to get into non-profit or human resources, types of jobs.
Four years ago when we purchased our home, the real estate market was great. We had what we thought was an excellent Adjustable Rate Mortgage and everything was wonderful. Now, we are faced with whether we should sell our home or figure out where to get the extra money for the mortgage when our ARM goes up on our 5 year anniversary in March.Preschool teaching isn't a stable career now considering that a lot of daycare centers are taking a huge hit with people pulling their kids out because they can't afford the tuition because they lost their job or their house. I do agree that there were people who wanted the huge house just for show and now have to move into an apartment because they can't afford it anymore, but there are those of us who are just hit with a bad economy and are struggling to look for some options. That' why this election is so important. We need someone who is really thinking about us, instead of a politician who's wife wears $300,000 worth of jewelry and clothes to a convention when most of us will never see that kind of money in our lives.
The financial meltdown will change many things in America, and we can start with campaign promises. You can say goodbye to universal health care, a cornerstone of Barack Obama's campaign strategy. Massive medical benefits are now impossible because the bailout will take all the money.
Also, sayonara to John McCain's across-the-board tax cuts. The Democrats will likely control Congress again and, in the face of a $750 billion expenditure, there is little chance taxes will decline in any significant way.
So, both candidates find themselves losing a major core issue because of the greedy, stupid mortgage scandal.
Just two weeks ago, the Palin bounce had John McCain leading Barack Obama in just about every national poll. Now McCain has fallen behind Senator Obama, and it's directly because of the economic madness.
Some Americans object to the feds bailing out companies that trafficked in risky mortgages. But if the government does not allocate taxpayer money to stop the economic bleeding, then what? Do you let the United States slide into a depression? The American economy is greatly dependent on foreign investment—oil sheiks and Chinese entrepreneurs buying our stocks and bonds. If overseas investors believe the U.S. economy is fundamentally unstable, they will pull their money out. That would be catastrophic for America.
Basically, the feds are playing a confidence game right now. They are assuring the world that our economy will not collapse. That assurance is vital.
But, once again, it is the folks who have to pay the bills, and pay we will. For the next four years, our tax dollars will be basically used for two things—fighting terrorists abroad and bailing out greedheads on Wall Street.
The FBI is investigating some corporate managers who made big money while their companies burned. People like former Merrill Lynch CEO Stanley O'Neal who allowed his company to buy bad mortgage paper and then, when things went south, walked away with a reported $150 million severance package. Meanwhile, millions of Merrill stockholders got hammered.
In any federal bailout, two things have to happen. First, the companies involved must pay back any "loans" after they get back on their feet. Secondly, the government must control the pay of the managers. That is non-negotiable. No more tax dollars for greedhead incompetents like O'Neal.
In the end, the American working person will pull the country out of this mess, just like we always do. But no longer can we the people trust the government to look out for us. The covenant between the folks and Washington has been badly damaged, there's no question about it.
And that may take a longer time to repair than the stupid mortgage mess
Anon you are so on point with your analysis.
A lot of people got ARMs back in the day. We have been in our house for the past 5 years, and my parents urged us to get a fixed rate, traditional mortgage. I think a lot of mortgage companies got greedy, they tried the more creative loans. I can feel comfortable knowing our mortgage stays about the same on a regular basis, the only thing that may adjust is for our escrow on the amount of homeowners insurance or property taxes, but that is a $30 or $40 dollar difference, sometimes it is goes down, sometimes up, but like now our mortgage is $70 less than it was last year due to my homeowners insurance switch.
"Davis Manafort, the lobbying firm owned by McCain’s campaign manager, Rick Davis, had received $15,000 a month from Freddie Mac from late 2005 until last month." http://www.nytimes.com/2008/09/28/opinion/28rich.html?_r=1&ref=opinion&oref=slogin
So, yeah, anonymous, that appears to be right.
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