I agree the bailout pack will not fix the problem, it will only postpone it meanwhile a few will arrange to limit or pass others their losses.

Hope no, but feel possible a meltdown due to lost in trust of the banks / politicians / big industryand state autority .

A lost of trust in the high society, the so called aristocracy at ancient Greece times.

The many poor have lent their money to those “caste” to allow their high rich living standard.

A large part of he rent money have been wasted and is not clear if and how it will return to the original owners.

The interesting question is: why were all these intelligent people inventing these wonderful new and sophisticated financial products so wrong? The answer is: they forgot the point made by Knight, (Knight, F.H. 1921 Risk, Uncertainty and Profit, Boston, Houghton Mifflin). Knight explains that uncertainty can not be reduced to mathematical calculation of risk. There is something called real uncertainty, which is the reality outside the mathematical models. Real uncertainty is caused by factors we do not know or exclude when we construct the model, such as in this case falling house prices. Real uncertainty cannot be calculated. One way of relating to real uncertainty is through the precautionary prinicple. The short story is: take care, do not position yourself in a spot where something terrible you do not yet know may happen to you. It is a simple wisdom, but easy to forget.

I believe that the bail.out package is a necesary step in the right direction, but it is not enough. The package will not restor the system back to pre-crisis times. The events leading to this financial crisis shows the importance of government-close-controls and supervision. The complexity of modern day financial systems necessitates the appreance of new economic theories. It is these time-crisis-situations that creates the suitable environment for the suggestion and acceptance of new theories in macro-economic management.

I have been following the debate on the business crisis in the US and its effect that it has on the world economy.I am not in the remotest of way connected with the financial world,but I cannot still understand the bail out reching a massive $700billion US.It is, as most boggers would say a bailout of rich people who already have a lot of money and would not be hurt if they lost a little, they still would have a roof over their heads, food on their table for themselves and their families,instead of this bailout of these private corporations by labeling it in the all important term which seems to follow anything and everthing done by the US politicians of being” in the interest of american peolple”-by the taxpayer, why doesnt the govt,invest in the future of “human potential” imagine if they gave away this money by making college education which happens to be so very expensive and sought after by all concerned and many not getting a shot at this only due to economic reasons, of rolling out more college educated and better professionals in every feild faster then they would normally do, of investing in health care for all, no ameriecan would then go to any hospital without the requiste insurance which would pay for this?If you divide the population of adult amriecans by that amount look what you would give every family to work with, I am sure the money thus invested in the “human potential”of its citizens would bring massive returns in all respect to its nation, and america has the money to do this.

I’m surprised noone has looked to the consequences of printing $700 billion for the banks. Divide it by the current reserve ratio set by the Fed, and you’ll get the tally on how much M1 is about to jump. Once this money trickles through the system we’ll see inflation rise, and the american family struggle even more.

I disagree with the bailout. Japan tried bailing out their banks and it prolonged their economic woes for over a decade. Let these fail and learn from their poor decisions. Subsidies for banks and poor speculation is what this amounts to.

Why aren’t out representatives listening? Why are articles that get down to the real problem, such as this one not thrust into the mainstream media like all the “Dooms day” “Must pass now!” ones.

When will this government ever get back to serving it’s people?

What happens to an economy when 700 Billion dollars in funny money is printed and inserted? Why isn’t ANYONE talking about this cause and effect?

Why isn’t anyone talking about how gas prices have played a role in our pending economic situation?

Why isn’t anyone talking about the many things that really lead to this “crisis” that we are in?

I will make the following statement.

I will NOT vote for anyone, whom votes FOR this measure. There will be no exceptions to my decision. ANY “bailout” plan for business is “stupid”, like most things that “the decider” has chosen to do during his reign of power and tyranny.

The Busch Cheney Fear Factor “Bailed Out” Edition needs to stop, now! Please LISTEN TO THOSE WHOM ELECTED YOU!

I agree with Jackson against the bailout plan; to address and tackle the problem you need to go beyond the immediate crisis and that calls for attention to the root cause rather than either the symptoms or the ailment.

The US will need to pay attention to regaining the confidence of its citizens; credibility needs to be re-established. This can only happen by re-visiting the policies that govern the economic lanscape; policies that have in fact been inherited to guarantee promising lifestyles for both high and low classes of the society.

Jackson proposes:

“Imposing a national, short-term freeze or moratorium on all foreclosures of owner-occupied primary residences

Granting bankruptcy judges authority to modify mortgages on primary residences

Establishing a program and procedures allowing restructuring of sub-prime loans under affordable, fixed-rate terms

These fair and modest steps will protect middle-class homeowners and stabilize the housing industry. The housing market must be secured if we expect to resolve the crisis and strengthen the economy” (& I would say stabilize).

Increase of living costs, taxes or any form, will only raise frustrations and will extend the crisis beyond the current situation. I suppose by addressing the housing industry within the global scene, (possibly a scale; loans against average annual income against a housing index per square meters to be shared in the aftermath to demonstrate transparency and restore credibility). There can be more insight prior to drawing a stable policy for the benefit of the US and possibly other nations.

The problem with the bailout program is that it does not confront the fundamental problem that is faced. The purported purpose was to set up a RTC type function to deal with the foreclosure issue. It has been turned into a rescue plan to bailout toxic paper. Until someone in a position of leadership addresses the fundamental issue of a staggering foreclosure rate with an attempt to stop it will not be solved. I could suggest a point-by-point plan that would meet much opposition but may work.
1. Freeze foreclosures
2. Instruct borrowers that they must continue to pay their mortgage effective immediately at the original mortgage rate they were given. (Current past due mortgage payments have to be set-aside for now and addressed later).
3. Have banks identify who the troubled borrowers are with their original application paperwork (i.e. appraisals, income qualification and credit scores).
4. Have the borrowers apply with their current income qualifications and credit scores. Have HUD perform a new appraisal.
5. HUD restructures the borrowers mortgage and it goes into the RTC like account and insured by HUD.
6. The difference between the banks initial valuation and mortgage will then have to be written as a loss to the bank.
7. At this point the bank can ask for a government backed loan to cover the period of time determined to be needed to absorb their losses.
8. In return for their participation in the program they have to continue to provide mortgage loans under newer conservative guidelines that everyone agrees were previously ignored.

There are going to people who will get more than they deserve and there will be people who will have been lost through the cracks. Furthermore the rest of us will have to participate in helping our fellow citizens out of a problem many of us believe should have never happened; however, when you are in a sinking boat everyone has to participate in bailing water, not just those who put the hole in the hull. The plan above would call for a lot of leadership by people who will have to set aside their own self-interest for the interest of this country and their neighbors in the world. This country is no longer an island and it must concern itself with its own interest in the context of how it affects the rest of the world. If someone doesn’t stand up quickly and lead us down the correct path, there is always someone willing to lead based on the irrational fears of the masses.

In the interest of full disclosure I am a real estate appraiser by profession. Any response would be appreciated.

I do not believe the new and improved bail out will help the economy. We are already tightening our belts and purse strings. Congress keeps telling us this bail out will allow people to get credit and loans for cars, education, homes and what nots. Has anyone given congress a reality check. Tonight, the house of reps will vote and the senate is very certain they will vote for this bail out. Is anyone listening or paying attention to us? Neither presidential candidates has spoken directly to those of us who oppose this bail out. All we hear is how it will allow people and small job owners to get loans…… I agree to the $250,000 increase of the banking insurance rate but I greatly disagree to the $850,000,000,000 bail out.

I wish we could send a stronger message to congress. Unfortunately, the wish may be to have the poorest holiday season ever. No Virginia there is no Santa Claus…. We can’t afford to buy gifts, we can barely afford groceries and gas and fuel cost for homes is going up. Maybe all of us should send our senators thank you cards with our bills attached. Maybe, then they will throw some of that money, which has miraculously appeared, our way.

I do not expect the Bail-Out Plan would deliver its full objectives. Instead it would deliver a limited amount of security that is needed by Financial Markets at this moment. The impact was empowered by the Housing Crisis which highlights that Ordinary People are having Financial Constraints and they suffer with the Increase in Finance Costs coupled together.

If another Credit Card Crisis occurs should the American Government deliver another Bail-Out Package to its People???

The objective is to maintain a positive and working “Cash / Credit Ratio” between the General Public and the People would directly get the benefits of any sort of package. The Authorities should come out with the more relevant levels of the Ratio, which positively contributes towards the Economy and the Lives of People as well. IF NOT, no plan would be successful.

Shameer
from
Sri Lanka

I completely agree with you that the real problem is more deep and difficult to solve. The problem is the large credit expansion that stimulated consumption beyond the limits of a healthy economy.

The idea of package is not bad but as far I can see the technical solution is not good. The Government have to save the bank system not the banks and their shareholders. Instead of buying “toxic assets” they should buy shares of the banks. Those shares could be sold again when the situation stabilizes.

I think that a recession is inevitable and perhaps it is the only real solution for this situation.

Everybody seems to blame the banks, but what about the citizens who borrowed too much, voted for tax cuts that increased the national debt, and voted for expensive wars. You voted for freewheeling capitalism, now you must pay the consequences, and whether you blame the banks or not, you will not escape.

Mirror mirror on the wall :which is the biggest sub-prime of them all ? Easy. It is the many trillions of $ the USA owes the rest of the world. Truly has it been said that the US borrows money from China to pay for the war in Iraq and war is not a remunerative investment; hence the crisis. The $700 bn bail out is only going to shift the dues from sub-prime borrwers ,like home owners, to sub-prime lenders, like China. There are others on both sides of the balance sheet and eventually the chickens will come home to roost. When China and the OPEC countries want their money back, there wont be a “bailer out” of last resort.
Chudamani Ratnam

I dont think the bailout will help. The problem boils down to 1 thing. Greed! Corporations arent happy with a small profit, it has to be bigger and bigger. Sometimes you have to cut cost to make the profit margin seem higher, so they cit jobs and outsource. I think its 1 thing Americans should learn from Mexicans and Asians…they are successful because they take care of family 1st. its not always comfortable in the beginning but it works out. Americans need to take care of home 1st. with Jobs, medical, and educational.

Why is college constantly getting more and more expensive and there is nothing more being offered?
Why is it mandatory for you to have insurance but not mandatory that insurance companies pay?

Americans dont want a social medical plan like other countries because they feel it will eat into the profits…the American system will work if the insurance companies are forced to pay..SINCE WE ARE PAYING THEM ANYWAY!!!

that all goes back to greed…but now we as tax payers are forced to help out the same people who raise your interest rate from 7% to 21% because you were late paying a different credit card.

They dont give us a break..why should we give it to them?

Here is a solution…give that money to the people and let the people use that money to pay off the house and cars and what everelse debt they have, thats sure to jump start the economy…and everybody wins.

Under the current bailout plan, only Wallstreet wins…You know what?!?!?! THE PEOPLE WILL STILL BE IN DEBT!!!

I say dont worry everything is going to be ok..we will over come any problem that comes or way just have faith. We didnt come this far to just loose it all. Its just a minor set back . Stop panic for every little thing you hear on TV or Radio and look around you we are still in the game and this problem can still be fixed. Go out their and shop buy cars spend money live your life because the people is the cause of this problem because we control the economy.

I don’t think that the bail out package has to fix the “real” economy.
The aim of the package must be to restore trust in the financial system avoiding further spreading of the crisis from Wall Street to Main Street and abroad.
The market capitalistic system will not suffer from the intervention of the government. Anyone, even the market, can need the help of a “doctor” sometimes.
The effect of the crisis on the prestige of US can be heavy but it will be completely forgotten in a near future if the government and all the main actors of the financial system react promptly and adequately.

agree on all 3 counts.
feel ,however, that in the long run ,free markets,with proper checks,as democracy has its own checks, will bring wealth creation;

I would like to treat the issue the other way around: What will happen, if there is no bailout?
Isn’t it true that the impact will be even more severe on confidence in the banking system? What about multiple bankrupts of banks all over the world? You think the self regulating forces of free markets will bring us to equilibrium? May be at some point, but what is the cost of this? As I do remember, the US Treasury did this kind of calculation and come to the conclusion that the cost of doing nothing would be considerably higher than a bailout package.

Basically, we’re screwed. If they do the bail out, then the people who did wrong get off easy, a half trillian dollars (must be said again: ONE HALF TRILLIAN DOLLARS) that we don’t have gets spent, and the problems that led to this crisis remain. If they DON’T do the bail out, confidence in the government and the econemy continue to plummet and the problems that led to this crisis also remain.
History lesson: All civilizations everywhere eventually fall. Its the life cycle of humanity. Maybe its our turn now.

My mistake: Its actually closer to three quarters of a trillian dollars. Thats why I don’t do math before coffee.

I agree with your take on the bail out.I’d add that Wall Street (to generalize) undoubtedly KNEW most of these lame mortgages agreements would falter, and counted on making a second killing by later foreclosing (mind you foreign entities who bought into this I’m certain thought the same). Clearly, no one thought the real estate bubble would burst.They wanted to put it to to average working Joe and now, through the bailout farce want to find yet another way.Government bled dry SSI and I was AMAZED they are trying to use the SSI shortages to further justify the bailout.If our elected officials are foolish enough to vote for this, we should promptly vote them out of office.As an American I am COMPLETELY DISGUSTED.Mind you, those who bought these adjustable mortgages should pay the price now.I didn’t buy a house, why should I pay for someone elses?! Sorry, if you got duped, you’ll be more careful the next time.Kiddies,there is no Santa Claus when it comes to money and profiteering.And one more thing,as Americans we have to stop borrowing from the world to pay for what we can’t afford.Big business(while stripping down salaries from what MY blue collar grandparents made, to put in their bottomless pockets) keep selling us this idea and we have to stop buying it.I could go on, but I’ve made my points.

I totally disagree with the bailout. It will prolong the cirsis and help only the rich monsters. The government should stop taking care of the rich idols and turn to help the needy and the poor.

As a Kenyan and apt news reader. I think the bail out plan may work, the economy of the U.S is already in shumbles what difference will this bail out make? If it helps the current situation it won’t do it in a significant way and if it doesn’t then there will be no significant difference.
It look like a lose - lose situation. Americans… its time to take a huge risk… in fact a desparate measure you may have everything to lose but if this bailout bill work’s you’ll also have everything to gain_ atleast in the short term. Choose your leaders wisely forget about politics loojk at facts and evidence.
Coming for a country like mine (Kenya) I understand the problems that arise during a elecction year economies suffer, people suffer. So make quick decisions, don’t delay because the outcome of waiting may be much worse.
I Support Barack Obama, I support the bail out bill

You are right. All the news today is about getting the altered bill through the House the second time, and which congressmen will change this time. No-one is saying that the fundamentals of the bill are wrong: its the wrong bill. The bill that should be put, and yet might be put, is the one whereby the bad loans are not shifted to government/public ownership. The people quite rightly do not want to own the bad loans. They do not want bailout. They want the buck to stop where the bad buck currently rests: with the people who took out the loans they could not afford, and the companies that made the loans.

The voice of the people is still not being heard.

America can find $700 billion for the rich and wealthy but not for the poor and starving???

The US has shown the world what happens when greed and excess are allowed to flourish as the Bush admistration has. Bush let his base have a free hand and they took it. That they ruined the economy did not matter to them. This is capitalism run amok. Just as socialism has its faults, we have now seen the dangers of capitalism. The US has tainted itself irreperably, politically, socially and economically. The individuals responsible for this misery are certainly not patriots who care about the state of their land.

This is crazy, the public should not be deprived like this. Where does the 700 B come from? reduce public spending that’s where. I wouldnt mind so much if Washington were saying “Fine, we will bail you out, but we want the entire board of directors dumped and new staff appointed, before we entrust this money to you”, but of course they aren’t saying this.
How they can consider and get approval for this is amazing, no way should those managers be permitted to remain, they have demonstrated the ultimate in poor stewardship, insolvency.

The roots of the problem are not financial but just too much consuming of the earth natural ressources and goods produce now by countries with low wages and little social benefits for their citizens( such as China India etc…) In order for the ecomies of the world to continue their development, business in general keep inducing people worldwide to buy and buy even more consumer goods mostel by lending money to them. They then borrow and most bank induce them to borrow even if they are not in a postion to repay. Consequently the system as run out of gaz.

Why should the tax payers in US and Europe should ultimately pay for the bankers who created such complicated financial systems that most of them do not understand and could not control?

A few month ago we fear the “Peak Oil” has been reached, now I believe that the “the “Money Peak” as been reached.

In essence, people in the most affluent nations have been living beyond their means, consuming limited resources at a rate beyond that which they can be replaced. Oil, gas and coal are fundamental to any modern economy, a major increase in their price has enormous repercussions. Excessive regulation and little interest on the part of the government and private investors has stifled creativity and prevented rapid construction of alternative energy like wind and solar power. Ethanol production has far worse return than wind power, and should never have been considered as a replacement for gasoline.

Good points Michael Smith. I like your ideas. And if businesses need an operating loan at this uncertain time, perhaps the US govt could be the lender. There still are small, local banks in every community that may be willing to finance operating loans too. If this is truly a crisis of the housing collapse then direct the bailout to mortgagees. Unfortunately we will be paying for non-housing junk debt as well.
Josh - your point about high gasoline and fuel prices is important. Many of these ‘bad’ loans would still be good if all of us weren’t paying for the oil speculators’ game?

Of course the bailout package will not be “the” solution. But it will be part of a number of steps that will get things working again.

We have been here before..the current crisis is yet just another market bubble.

Hang on…happy days will be here again

Greg Atkinson

http://www.shareswatch.com.au/blog/

the bailout plan is a step that america needs to take to fix the financial problem, no problem is ever fixed by doing only one step, when that is done thell be other things to do, yust remember one step at a time and well get there!

I fully concur with Michael Stevens assessment. However, I would add that the corrupt Bankers and Wall Street started this trend of unethical lending so that they can get the hugh bonuses that have been dished out over the past years are held accountable. These bonus helped trigger unethical lending practices to further line up their pockets.

Find whoever is responsible and hold them accountable and make them return the money to assist the people that are most hurt by this crisis.

We have lost our ways…it is that simple.
There was a time when Banks simply received money from depositors and invested these funds prudently; when Wall st. served as a capital formation center for REAL enterprises; when venture capital served as seed money for GOOD and REAL ideas; when the casinos were where folks would squander their money hoping for a quick return; and loan sharking was practiced at the risk of perpetual damnation. Well, folks, it is all one big pile now. One can not tell what’s what.

What is the answer? NO BAIL OUT.

Let the systen work. IT will rid itself of all the bad paper, of the speculators, of those that deserve to loose their ill gotten gains. At the other side of the tunnel the system will emerge clean, efficient and back to its basics. The role of Government ? Simply pick up the pieces along the way to make sure that the average citizen does not loose his life savings.

The last thing we need is hundreds of Government agents CONDUCTING the economy…GOD help us.

I think that the proposed bailout is less likely to fix the real economy than to increase the immense national debt that the American public will paying for generations to come.

Before the American people are asked to bail out the fraudulent authorities and executives responsible for the present situation, the assets of these latter should be frozen, and their crimes and the damages resulting from them made public.

In protest I have withdrawn my vote for a presidential candidate who approved the bailout yesterday.

Dear Todd,

Back in the Asian crisis in 1997 the US told us we can not bail out any of the banks and financial institutions as a precondition for being granted the IMF loan. So in Thailand 56 finance compaines and several backs went down the drain, our feeling here in Thailand is what a HYPOCRITE, you teach what you preach. We swallowed a strong concoction of medicine back then and a lot of people lost out, but now our economy is doing better.

I think this decade - and this Bush administration - has been literally a disaster of historic proportions for the US, one from which it may not recover. The US has lost a lot of its political authority in the World and encouraged the EU to start to look to take over that role in, say, the middle east, Georgia etc. This credit crunch now signals the end of laisse faire capitalism, at least for a long time, and also signals a decisive shift in economic power from the West to the Middle & Far East. The US now only has its military power left and even this is weakening. I think that the 20th century may be known as the century when the US saw its ‘golden time’ but it is now entering a terminal decline in World influence.

I’m reminded of my mentor’s old saying that “prescription without diagnosis is malpractice” when used with consulting to businesses. I agree with Michael’s offered solutions that let’s focus on the problem and work to correct it.

Part of the solution is recognizing what got us there. Many of us are as guilty of “laissez faire politics” while we simultaneously point the finger at laissez faire derugulation and ask “who was watching all this take place.” U.S. voters have been apathetic in monitoring and making our voices heard by our legislators. And we are now paying the price for that inattention.

The House version being voted on is laden with pork in an effort to win votes. I’m still wondering how subsidizing an arrow making company in Oregon gets to the root cause of this problem. It is symbolic of the larger issue facing us–a Congress unable to join together and tend to the needs of its citizens without a “what’s in it for me and my state” mentality.

Will the bailout work? No. Why? Because what this country is lacking at all levels is an ethical and moral compass to operate by. What we’re witnessing is a complete failure of trust for our fellow citizens and our “leadership” at the legislative level and executive levels. It’s an issue of trust as well as entitlement.

Going to war caused this. It has cost billions, even though the people did not want it in the first place. Now we have to pay for it.

I’m not an economy buff, but even I know that this will not FIX the problem.
But it may be one of the few options we have. Many see it as a rub-on cure, when it’s just a salve.
At best it will be a pillow to cushion a 10 story fall.
As a ridiculous optimist, I’d say things will eventually level out, and most people will ultimately be fine. But who’s to say?

Hello,

I agree with a number of points made by Todd here, except that the so-called bail-out will work; at least to the extend to avoid the immediate bancruptcy of more banks, leading to ever tightening credit to other banks, unemployment andsoforth.
As for the US financial leadership: I guess that will go south the same way its moral leadership did under GWB governance.
Something to consider: didn’t the media’s coverage of the supercharged economy and their CEO superstars contribute to creating the bubble?
CEO’s are no rockstars and should be treated critically.
Best regards,
Chris

Fractional Reserve Banking destroy us!

This crisis has been caused by fractional reserve banking, eg. banks abd fianciial institutions lending money out they don’t have. As long as interest was paid, they thought they were alright. When people start taking their money out, all banks will eventually collapse. Let me quote by Murray N. Rothbard:

“Let’s see how the fractional reserve process works, in the absence of a central bank. I set up a Rothbard Bank, and invest $1,000 of cash (whether gold or government paper does not matter here). Then I “lend out” $10,000 to someone, either for consumer spending or to invest in his business. How can I “lend out” far more than I have? Ahh, that’s the magic of the “fraction” in the fractional reserve. I simply open up a checking account of $10,000 which I am happy to lend to Mr. Jones. Why does Jones borrow from me? Well, for one thing, I can charge a lower rate of interest than savers would. I don’t have to save up the money myself, but simply can counterfeit it out of thin air. (In the nineteenth century, I would have been able to issue bank notes, but the Federal Reserve now monopolizes note issues.) Since demand deposits at the Rothbard Bank function as equivalent to cash, the nation’s money supply has just, by magic, increased by $10,000. The inflationary, counterfeiting process is under way. ”

If they succeed to bail out the banks, then only normal people will loose their money, shares and bonds. If they don’t we will face the same future. We can non see why that is more fair!!

M Westerlund

Other than my 401K getting hammered I don’t see the downside to this credit crunch. The country’s ability to recover from 911 and the last recession was primarily due to an unprescedented building and real estate boom. Booms go to bust. The good times can’t go on forever. I work for a leasing company and there’s plenty of money to lend. Small business owners aren’t having any trouble getting money I know because I routinely lose business to local banks. So exactly how is Wall Street bad for Main Street? The numbers on Wall Street haven’t been value-based in a long time so these stock slides are inevitable. Besides the large banks and large investors who else benefits from this bailout?

One of the greatest moment of this mess was the congress decision not to support this bail crash. I think this was one of the greatest moments of amercian democracy. I hope , but I doubt, the congress will now stand on the way of the senat and Bush and the big tycoons with their medias for the second round.

I say let the ones who caused the mess bleed and help those who will really suffer from this mess, help those who are loosing their homes, workplace or cars. Do not help the criminals!

No, this bailout will not help. Your middle class is what keeps the country financially solvent. With the gas & food prices increasing at amazing bounds we have had to decide if we want to eat versus buying a new car or investing. People can’t afford to pay their morgages because they need to eat or put gas in their car to get to work. They have had to draw money out of their 401K just to keep their head above war to pay for the increasing cost for electric, food & fuel. Come on people, this bailout will not get to the root of the problem which is corporate, wall street and government greed. Money will not start flowing again, because your every day Joe Blow still cannot afford to borrow money because he knows he can’t afford the payments. He can,t afford to invest any of his hard earned dollars, instead he is having to draw out his and his childrens future to stay alive today. So why keep companies going alittle longer at our expense for the very same result.

Of course, there is no panacea for a market in crisis. The 700 bl or 850 bl will not solve the problems.
In any case, there will be a prolongated downward economy, even if somehow minorated with the bail ou package.
But only time will show the adjustments, and the same robber barons will be back, using the same con schemes, maybe in three to five years the same madness may occur, if regulation and due inspection do not inhibit the exagerated greed.

I completely agree that a bailout, no matter its construction, will not work. It is NOT just the banking industry that is screwed up, nor the stock market, not even the people running these institutions it is much more basic. It is the American Dream that has been dramtically altered, no that is not even true, the dream is fine, it is now the complete dream is wanted all at once and the only way that can happen is with credit. I remember when I bought my first car back in the early sixties, my father explained to me that you can buy your first car on credit, but cash for all the rest. Now it is credit for everything that is advertised on television. Do the banks scare me, no, not even the stock market but, what if, just what if Visa fails … nobody has that much money to cover that one.

Can someone explain this to me please? These people had no clue this was coming. How is it that you think they can fix it?

Well, the bailout plan ( USD 700 bilion) is payed with money that was actually destined for other purposes. Sure, everybody says that the tax payer will pay for it, but in fact, that money was already payed before and had a destination. The tax payer pays for governamental services, like the educational system. And now we are reading that that money will not receive the destination, right? It was supposed to be used for paying schools in California, pay the salaries of all the unemployed people that are coming more and more, and maintenance of roads, police, and all other governamental services. And now it will be used to pay just a tip of the iceberg. It will even not be enough. It does not solve anything, it will just create other problems in other areas. Either way, if the plan makes it or not, I do not see any happy ending in the situation. Hope I am wrong…

The proposed financial bailout contemplates a choice between taxpayers assuming the costs of the bad decisions made by Wall Street and the government, or the threatened total collapse of government services and business should the bailout not pass. I would like to see some consideration to funding new financing for qualified borrowers, either through existing financial institutions that have maintained fiscally sound lending activities or a newly chartered entity, that injects needed capital to the markets without assuming the risk of loss in buying billions of bad debt. The offending institutions can sit on their bad paper until the market turns.

This ‘bailout’ is more like a bad ‘amalgam’ filling for a thoroughly rotten set of teeth. It will allow for a few more bites of the same unhealthy food our Markets-Casino mentality has learned to feed greedy people. But bad eating habits & poor dentistry combined will not enhance our health in any way. Greed has taken over, become all-pervasive & invasive. ‘Money’ itself has lost all ‘value’ & unbridled ‘Capitalism’ is much to blame. How could it be otherwise, when ‘we’ don’t object paying millions to a relatively few adapt at kicking, chasing or catching spheres, along with others ‘performing their act’ in front of a mike & then those well-groomed, pin-striped ‘Execs’ who have conned ‘us’ into believing they ‘know something’; i.e. how to get ‘rich’ while watching TV…What incentive is there now for anyone to invest 10-12 years of their lives in pursuit of academic credentials, when ‘making money’ is so e a s y & even if you fail, especially if you fail BIG, there’s always the tax-payer….Correct?! We’re about to find out just how easy it really is!!

yes,I agree the bailout won’t work.The problem was created by global forces and only a coordinated global action will solve this problem.Problems of USA are intricately tied up with the other countries and their economy,so, having american centric solution will just not work.
What will be the response of other economies? will they too have thier own version of bail-out plan? They too will face this problem.Do they have resources to fight it out?I doubt and this scares me a lot.The failure of other countries,too,will get reflected on USA. Draw your own scenario,I am sure it very scarry.

The bale out is about restoring credit into the worlds wide economy and lowering those long term libor rates whether its sterling, dollar or euro whilst unwinding of market positions occurs to lessen further loseses.

There is a corollary of recapitlaising the Banks above and beyond buying up and removing the toxic ABS and MDS. Now that has a silent audience as it is two prong attack on the credit crunch which the world centrla banks cannot reasonably and ethically affords.

For that reason the bailout package wouldn’t cure the problem. In the UK since 2001, the commerical banks have taken over 1 trilion dollors in CDO swaps with the central bank of England. Still the banks need more and will soon have no more high quality asset bonds to swap for liquidity…..then what next…..so they need to be recapitlaised and the bale out US style wouldn’t helped them indirectly or is the bail out already occurred here - silent nationalisation of unmarketable assets.

Banks cannot do another round of new ordinary share issue, it would look crass and will diminish confidence further….and no one know how to recapitalise the Banks other than to use more tax payers money?? And so the UK Blue chip companies Dow Jones averages will be owned by the tax payers? Socialism for surety and that would not be palliable to Congress or Parliament. A vicious circle is what we have…………….

United Kingdom

Judging by the hype, the bailout must be necessary, but in my eyes, the case hasn’t really been convincingly made.

What exactly will happen if the bailout isn’t passed? has this been adequately explained? Are we sure that it won’t happen with the bailout? I think the most miserable situation would be if the bailout were passed, but the feared meltdown or whatever happens anyway.

I haven’t read about one alternative. It seems very strange to me … it seems that there just has to be some alternative. Maybe the mortgage holders should be bailed out instead? Wouldn’t it solve the problem if the principle of the bad mortgages were reduced by the amount of value that was lost on the house? Isn’t there any alternative at all to spending $700,000,000,000 !!? It seems odd if there aren’t any alternatives. Why isn’t anyone suggesting alternatives?

Maybe there should be a special one-time tax on the rich to raise the money … how would that be?

Hi there, I somewhat agree with your comments but I believe that the present recession is mostly due to fear and lack of trust more than real fundamentals. It is true that the housing sector is crumbling and consumers spending contributed to rescue the economy from the past recession in 2001-2002 but on the other hand US consumers were spending then money they did not have.

Americans must reduce their liabilities and these evenst will serve as a hard lesson to many. Going forward the debt ratio in the US will shrink and Americans will be more thoughtful in saving money and building a nest egg so that the next time they’ll be better off in facing a similar situation.

Using your home as an ATM machine doesn’t mean that you’re now richer than before. In Canada we’re doing things differently: our mortgages for instance are NOT tax deductible like in the US and therefore Canadians have been very diligent in paying off their debt.

Our financial system is much more regulated - I know because I work in it - and lending is very much scrutinized by financial auditors leaving very little space for “cow boy lending” strategies.

Having said that, I believe the US economy is the most resilient and global based than any other one in the world. You guys will get through this. Our faith is linked to yours as we’re trading partners. Look north for some solutions to this mess.

Unemployment rates are half now than we had back in 1990-1991and as soon the package is passed - hope so - slowly but surely money will start flowing again allowing banks to trust and lend to each other. The recovery will come faster than you may think.

Thank you for your time. Your commenst are welcome of course.

Take care and God bless America!

Robert Montemurro MBA

Ironically, part of the bailout is supposed to keep credit flowing to consumers. Simultaneously it was also consumer debt that contributed to the problem. When will these people ever learn to tighten their belts and live within their means, if the government keeps throwing money at them?

Your article seems to be full of pessimistic previsiion. Why do you ask then if we agree to it)? Obviously you aren t so sure abour your pre-dicitions. Pleas don-t opinate, rather look for good ideas to overcome the situation.
Thank you!

While most people seem to be in panic , I’m still looking for the downside to the ‘credit crisis’ but all I’m hearing is that people won’t be able to get into debt to buy unessential new goods such as cars, pickups etc. That they will have to save up for luxury items rather than having them now (at higher cost than they will when businesses are forced to drop prices). That those people who relied on ‘credit card living’ will now have to live within their means. That greedy and inefficient businesses will be foced to close and those that expanded within their means or/and remained diciplined with their overheads will prosper and grow. That overall prices will fall and housing will come back within range of first time buyers even if they do need to save a bigger deposit and probably pay higher interest (7% of 100k being better than 6% of 200k!! from a buyers point of view). And yet we are supposed to believe that by injecting 700 billion dollars (and perhaps altering accounting systems so as to further disguise losses) and thereby encouraging us all to continue riding this debt train that this is going to improve our standard of living enhance the wealth of our nations and be an overall ‘good thing’ for our economies!

I agree with you that this bailout is not going to work. At best it is a bandaid on a massive hemorrage, slowing the effect, but not curing it at the source. Futhermore with Congress tacking on several non related pork barrel ammendments to get them through this legislation, it shows the leadership has learned nothing and further enhances the Lost Morality in both the system and the leadership. In the mean time, the bailout will further indebt out nation to China, Russia, Japan and the Arab Nations who will be needed to buy up the bonds to raise the cash necessary. For the long term, I fear the worse.

One thing you can definetly expect is HUGE inflation increases, But then again greed is the real issue, Its hard to understand why Mr Bush can find 700 Billion to keep the greed going but yet a little child is asleep in an alley? And George calls himself a Christian haha

I am surprise to learn that businesses run on credit like consumers live on credit. Is living above your means different for businesses? What I hope comes from all of this is EMPATHY. So, we can all just get along.

Up until about a week ago , I had the greatest respect for Warren Buffett , mostly as the ultimate , smart businessman, but also one with some kind of moral fiber.

Now it appears that he too is quite happy to jump in and make large profits in the long term off the backs of hundreds of thousands of innocent victims of Wall St gamblers and speculators. This in my humble opinion, is way beyond ‘good business’. His ‘ investment’ in Goldman, is no different to a vulture picking the bones of an animal , already mauled by the fat cats in New York. The GE deal maybe somewhat different.

Can someone please tell me if my assessment is wrong..

Instead of bailing out the banks with that amount of money which might or might not work, why can’t the politicians consider dividing that money into 10 - 20 million parts and paying off the mortgages of a significant number of close to defaulting American homeowners. They would each get 35000 - 70000 dollars. This would also prop the lower end of the housing market, lead to a slower fall in house prices even of medium priced ones. Banks will benefit and be more willing to lend. Their toxic assets would decrease. Ordinary Americans would feel directly benefited. Overall a win-win solution. Then again would politicians really care if money does not enter the same system that lets them thrive.

The financial crisis in America is far worse than the Government is telling the public - this $700 billion bailout is a Band-aid solution for a financial “heart attack” - it makes everyone feel better that something is being done but will be completely ineffective against the true underlying problem.

This collapse of the “House of Debt” economic system was inevitable regardless of who the government is pointing the finger at presently. An economy based on unlimited spending and indebttedness is bound to fail.

The Bail Out package will vanish without trace. The impact will just be of
a psychological nature. I bet, the real numbers of what we are up against have`nt even surfaced yet.
700 billion, why not 2500 billion? Nothing will be enough and anyway, it will just corrode the system.
The only interesting question is , what comes next?

The bailout, if passed, will set a very dangerous precedent. It must NOT be passed. It is imperative, however, to do the following:

1. Punish those responsible (if any) for the disaster.
2. Enforce stronger and stricter trading rules - this will reduce entropy generation in the economy.
3. Reduce substantially the complexity (depth) of derivatives. This too will prevent very fast entropy increases in the market. Some derivatives look like quantum mechanics!
4. Recognize that in very turbulent economies, conventional risk rating and risk management techniques simply don’t work.
5. Move from risk management to complexity management. Our economy is complex and it will continue to get more complex. Today, complexity can be measured and managed.

Bail-out, I believe, is not only to bolster the market, but also to rescue, not the Investment Banks, but the underlying homeless US citizens. As I understand lending policies of US commercial banks, sub-prime crisis have been taken over by investment Banks from commercial Banks, the latter being the direct lenders under sub-prime mortgage. Investment Banks should have been brought, long back, under the regulatory system of the Federal Reserve and also SEC, in as much as these Banks are trading in mortgage-linked security of sub-prime lending of commercial Banks and as the trade amounts to indirect lending to such housing. Had these been done earlier, leveraging norms could have been enforced by the Federal Reserve at the initial stage itself. The requests of GM & JP Morgan for status change to commercial Banks are pointers here. Secondly, the bail-out is in other words a market intervention to increase the liquidity to restore the confidence of inter-Banks which include banks worldwide. Thirdly, the moves of US govt., will, to certain extent, stabilize the US$
Fourthly, a world market can`t be developed overnight with a booming investor confidence. This could be done over a long period only which is inter-linked to policies of the Govt., concerned, it`s strength,etc. However, my heart goes to those innocent homeless citizens who, I read in News column, are sleeping inside cars parked on rentals. The bail-out, must,therefore, address the sufferings of those citizens also.

All of the suggestions made have merit. Some (i.e., temporary
freeze on foreclosures of primary residence), are better than
others with an immediate effect.
However, what we’re seeing is the cascading effect of the
imploding bubble. An implosion that is near reaching
“critical mass” in momentum will neither distinguish
between sub-prime or prime, sound business opportunities
or worthless scams. If something demonstrative is not done
quickly, we will go into the next “Great Depression”.

The bailout is a necessity, although only the beginnings of a necessity. A quick examination of the history books leaves no questions as to the cause of this financial mess, a point which Mr. Benjamin seems to ignore: free trade itself IS the problem. Regulation is a necessity in any dynamic economy, although regulation itself has to be kept in check.

I agree with Mr. Stevens’ points on helping the economy get back on its feet. We cannot now let an overheated sense of justice, pushed for by the hysteric masses, allow us to take our eye off the real problem. In the late 1980s, the Japanese government refused to bail out it’s banks. It’s stock market is a third today of what it was back then. The Scandinavians, on the other hand, bailed out their troubled markets, and the government was able to make a tidy profit through stakes in several banks, which was promptly fed back to the taxpayers. Scandinavia came out of it’s economic downturn in 1993. Japan still hasn’t come out of it’s crisis.

Economic doom-and-gloom pieces such as Mr. Benjamin’s, I’m sorry to say, do nothing but to propagate mass hysteria. There are solutions to this crisis. There are solutions to any crisis. If humanity had believed every prophet of universal misery, we should all have committed mass suicide before birth. With all due respect, a piece on the potential solutions to this crisis would be better received than the current fear-mongering.

The current economic downturn may well strike a blow against the Republican Party’s blatant advocacy of laissez-faire, if so, this will be a most welcome blow. But I somehow doubt the US population, a fifth of which is incapable of locating the US on a world map, will be capable of comprehending this.

As for the image of the United States abroad, should it show it’s ability to lead and ignore the current finger-pointing and fear-mongering, this should receive a tremendous boost, although, thankfully, not in the name of free-market capitalism.

I live and work in Rome, Italy,and have seen the fall in the value of the U.S. dollar ever since the Euro was introduced in the European Community. With the current financial crisis in the United States, it is painfully obvious that the crisis in U.S. financial markets and the packaging and sale of morgaged debt, has slowly spread to Europe.Thus, the U.S. model of free market enterprise capitalism, is less likely to find itself as a model for export. Rather, the conservative style of European banking, relying on bank deposits, and tighter controls for speculative financial instruments, may be of interest to U.S. regulators after the dust settles in the current crisis. How does Sweden or Germany or Holland, for example, regulate the banking sector. It is time, in my opinion, to look at our European neighbors for remedies and solutions and regulatory models. Meanwhile, as foreclosures increase, and banks go under in the United States, I ask my fellow Americans to demand from the U.S. Congress to stop spreading the pork and look at real regulation for the banking sector.

How a bit of history for a change?
This is what “Thomas Jefferson” wrote in a letter to the secretary of the Treasury in 1802.

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Bailout package won´t work, as it is a basically a reverse Robin Hood - taking from the poor to help out the rich …

But, from there, you need to change peoples mindset … Lets remember what got us into this. Greed. Greed from Wall Street (giving to people who couldn´t afford to repay), Greed from Main Street (accepting when they couldn´t affford to repay) … don´t take a loan if you can´t afford it. Don´t buy a house if you can´t afford it .. but herein lies the problem - it is the great american dream to own your own home, and as god as my witness I will - at least until I can´t afford to repay the loan and I get kicked out the streets, complaining why!? why me!? … but the banks will be protected by their friends in treasury who will bail them out.

Sure go ahead and give billions of our dollars to the banks while they take our homes and lives away from us, why not?

We need a rescue plan for the economy but it must be the right one. While I like the fundamental core of the bill, an oversight provision , addressing CEO bonuses, improved level of FDIC, taxpayer protection, etc., In my opinion we are still missing some important points.

One, we need language that states lending practices will be revamped and regulated.

We need language that will change the way credit card companies do business with the american consumer.

We need language that will place all of those institutions that got us into this mess to be on “probation” or some sort of government “watch dog” list. These institutions do not deserve to stay afloat and they should be absorbed by the market.

We need greater and more specific language regarding CEO’s and their compensation/bonuses. If anyone shares direct responsibility for getting us into this mess, it is these irresponsible CEO’s.

And we need assurances that an investigation will be conducted into those responsible for these lending practices and JAIL TIME NEEDS TO BE SERVED!!!!

As the market rises and falls dramatically every day, who is making a profit on this?

Do you believe that there are wealthy large investors playing the DOW and other markets for their own benefit. Buying a large number of stocks thus driving the market up 200 points then selling them off to gain a quick profit thereby driving the market down again, only to repeat this process over and over again? Would this be a form of stock market abuse that all of us are paying the price?

What we shall probably face is a huge slow down but not a meltdown. The bail-out will help not to make thinks worse, but the leading economies must enforce quikly new regulations to bring the financial markets creativity under control. That is an obligation for those governments in the leading financial markets which carried the entire world into the present situation. The USA will remain the beacon of capitalism and free markets, as free as convenient. Not for any moral leadership, but for the fact that they represent 40 % of the global GNP.

The problem is not Wall Street vs. Main Street. We are all connected to a high-speed, complex economy that does not produce enough real goods any more. Thus, our economy diversified laterally and invented new services and niche industries. There is a lack of tough creativity and new enterprises needed for a global economy. Only new industries created to confront the gigantic task of cooling and cleaning the earth while still powering up a knowledge-based society that can provide basic nees to ALL its citizens can rescue us.

The fault is not in Wall Street. It is in us for dumbing down, rejecting science and knowledge, goofing off in school, and refusing to save from our paychecks for a rainy day. We are in the biblical “seven lean years” and need to change our “lifestyles.” We can pull ourselves out of this mess by electing smart leaders and respecting learning and producing real goods.

No such thing. We short circuited capitalism and let the FED create billions out of nothing and lend them without security to all and sundry. They got excited and built, purchased and spent and created lots of work to replace the work in the industries exported to China.

We should in stead, have retained our industries, protected our workers against slave labor in the over-populated countries, and managed with the money we could save ourselves.

Capitalism would normally have to lend only that capital saved up by the people. If more money is required, then the interest rate will increase, if less capital is needed, it will descend.

What the FED did was produce imbalance and delayed and delayed inflation.

Hi, The bail out package will not halt or help the crisis.. Let the people responsible for the mess go down with it and perhaps that will teach other investors about ethics and how not to speculate. its insane how banks and investment companies play around with such amount of OUR money and the whole system is inviting for greed..

Capitalistic Democracy has proven to be a shameful system and bring out the worst in people. How much money is enough?
You wanted all and now you have nothing. I hope this will not even stretch out so far outside USA that my mother in Sweden have to leave her house too. This insanity has to stop…

look inside and stop putting asphalt on mother earth, stop replacing goodness with greed, awake from your nightmare US!

Michael Stevens has the best idea so far. Bail out the people not the banks, keep people in their homes or the bills will get higher. AND put a lid on those outrageous bonuses and salaries. Shareholders - you are being severely ripped off, it’s about time there was some real “equity” in the market place.

I think our politicians are idiots. They have just sadled all of us with a great debt. I will not vote for any of the ones that voted for this. Since both Presidential candidates voted for this - I’ll just have to pick the lessor of two evils. Probably Obama. Though hes like all the rest just talk. Four years from now we will be hearing the same thing - we need change, our healthcare system is broken. We are the laughing stock of the world - I’m ashamed to even live here.

Son- 1/never a borrower or a lender be. 2/ Always tell the true. 3/Do unto others as you would have them do unto you. 4/ Don’t try to convince or influence others with force-they will resent it and retaliate.
As my coach said ” You are all a bunch of miserable screwups-we are going back to basics”.

I am a strong advocate of the theory of monetary economics, and to this end, I believe, the bail out package will help alleviate some of the liquidity shortage within the US market. However, I am of the opinion that the bail out package by itself cannot be considered a panacea for the credit crunch.

This is because the bail out package will not weed out the institutions that have been grossly responsible for the misallocation of scarce resources, which is the primary cause for the current predicament. Instead, these institutions will will be given a life-line to continue with their inefficient and non-value adding operations.

To address this, the free market mechanism must be allowed to operate unhindered, as painful as the short term effects may be. In the longer term, the economy will evolve to become resilient, the weak and inefficient institutions will either be acquired by stronger and more efficient institutions or will simply experience a natural economic death. There will be a loss of jobs and security, and this is where the US Govt must intervene to facilitate a smoother transition for these people to acquire new skill sets for a new economic landscape, where there is improved allocation of scarce economic resources.

This will of course take time and will not necessarily be completely addressed within one Presidential/political cycle. Hence, the deliberation and ultimate decision is driven by politics and not necessarily economics, whereby the “quick fix” solution with short term benefits is almost always opted for in return for electoral votes, at the expense of the long term benefits.

Until the issue of accountability is resolved injecting money into a failed system will only bring short term releif.
The financial sector is very much interested in the here and now and not the long term. Managers are paid large bonuses for closing deals regardless if the deal is good or bad. If the deal turns out to be bad a golden parachute is offered to those in charge and lower level employees are made redundent to reduce costs.
Until this kind of behaviour is addressed nothing will change.

The bail out will be an aspirin to the suffering, but will not kill the cancer. Certain large investment, banking and mortgage firms will be helped with large amounts of money to continue their operations. I don´t see any plan to rescue the common citizen from its debt and, the money that will help the large firms to survive comes from the taxes and savings of all of us. In other words, this situation is toward a SOCIALIZATION OF THE LOSSES!!!

Do we really need hi paid people to work in the financial departments of our government? I don´t think so, any one with minimun education can cause this caos.

The main rpblem with this credit problem is simple.
Look at where it started in the US.
They live on nothing but credit, pay by cash and you will be looked at as if you are mad.
Most people in the EU have 1 credit card and maybe 1 debit card.
Most in the US have wallets full of cards.

GO BACK to old days save for what you wont and dont buy it on credit.
Company should stay within thier own limits and not go beyond what they can afford.

I think the enomonic crisis goes way beyond Wall Street and mortgage issues. It goes all the way to the bottom. American spending is out of control on every level. American’s want more. More, more, more. We are an excessive nation who is irresponsible with money. And we’ll stab each other in the back to get it.

I don’t believe a bail-out is the answer. I believe the only answer is to let the economy crash and bring people back down to earth.

I can’t believe what I am reading, “freewheeling capitalism”? Surely contributors to CNN are more versed in reality than that. I’m not big on words, so do some research (for once it appears):

Fact – this crisis is created by subprime mortgages

Fact – subprime mortgages grew dramatically after President Clinton revised the Community Reinvestment Act in 1995. Google it

Fact – due to the large increase and securitization of these mortgages, house prices far outpaced inflation (CPI) from 1996 onwards creating a bubble. Google it

Fact - Fannie Mae and Freddie Mac a government backed institutions that purchase subprime mortgages from other banks or lending institutions, creating a “false” demand for these products as driven by the CRA revision in 1995 above

Fact – only ONE of the two current candidates for President co-sponsored legislation in 2005 to provide MORE CONTROL by the government over Fannie Mae and Freddie Mac and it IS NOT OBAMA. Google it (Bill S-190 The Housing Regulatory Act).

So, Republicans in congress developed legislation to create more control over a run-away social engineering experiment driven by Democrats and Todd Benjamin thinks this is “freewheeling capitalism”? Go on vote for the change that got us in this mess, you deserve more of the same. Ayn Rand is rolling in her grave.

the bailout wil not as such solve the problem unless the us government actively goes afther the wall street fat cats and the money they made thru in morral behaviour wich i dopubt since that would mean that there long term dreams of being invited into the old boys network wil be destroyed the mometn the take action against the walstreet firms.
personaly i thionk the best way would have been to use the money to solve the bad morgage crisis thru bying those from the banks and give the people the chance to make a fair morgage on there house instead of the ones they have now

Todd, you’re absolutely correct about that the bailout package won’t fix the crisis. But neither will denouncing capitalism and free-markets and start to look at China as some sort of weird role model for our future generations. I don’t know about you Todd, but to me that is a quite worrying future. State regulations and protection got us in to this through creating Fannie Mae and Freddie Mac etc, and now they are bailing them and wall street out. I don’t believe in this method. You cannot privatize profits and socialize losses. Then you definitely do NOT have “freewheeling capitalism”, you have quite a regulated market. Now Mr. Paulson will be some sort of weird economic czar and it will not lead us anywhere. Maybe to a situation with a form of Chinese “democracy” with mass surveillance and massive state intervention in our economy and private life.

Pro Libertate Nostra!
//tegis.wordpress.com

I am glad that finally it is time to talk real politics in the US, a superpower run until now as a two party market totalitarism parading as a democracy. This farce has been played before the American people for much too long and until now middle class was mum on the issue.

Real polirics, that is to say, meaning of capitalism and socialism will surely be discussed in the future.

The gimmick played by the House of not passing it the first time and then passing the bill after scaring the public by the stock market drop following the first vote and adding a few sweeteners will surely be seen by more Americans.

If there was democracy in the US, the approval rating of the House and the president wouldn’t be under 20%. This is not just another number. This means US government does not represent American people!

Simple fact but people keep overseeing it. Corporate democracy goes only so far!

Where are the Free Market guru’s from IMF? They advised complete lack of government intervention in every other country around the world and America prospered. Why are they not allowing the same “Free Market ” principles to solve America’s crisis?

What will people in South America, China, The Far East, Poland, Russia, Afganisataan and Iraq. thinks if when you are sick, you wont take your own medicine!

The package, will not work if not follow by severe regulatory legislation , if anything else is not done it will be the final heist of the wall street against the capitalist economy. And since the problem is confidence, many companies most change their Executive board in order to gain the confidence of the investors. Finally, the sad really is that banks don’t want to loose money. So if the people can’t pay, the the government must pay.

Could CNN do a show on identifying the “pork” elements in the bailout bill and who were they sponsored by? Thank you.

I am a MBA from IIMB and also a US Mortgage Underwriter. This bailout package is just a temporary instead they could have invested in the Human Capital to make the education accessible to the students, why should everybody pay for the mistake of a few. It is wrong to say that they did not have any clue till the bubble burst. There were signs that things were not going right since 3 or more years. The so called Leaders keep quite and see all the drama going on till the bubble burst. This is not a game. This is real life and is being played with many peoples lives and sentiments. we feel this bail out package is just to show the public that they are doing something ahead of elections. I dont know how much of it would really help common people like us.

I also will not be voting for anyone who supported this bill. I have never been more fustrated in my life. Let the market fall it would fall hard but we would make a swift recovery. Now were prolonging it, and it will be much worse and harder on us. You watch and see a year from now we will be in a worse way and everyone who voted for this will be pointing the fingers at eachother, and the Americans that beleived their leaders in the house and senate will finally open their eyes and relize that Democrat- Republican it doesn’t matter they obviously aren’t there for the people. But unfortunitly it will be too late. I hope all those extra’s that are going to be given ARE HAPPY. It’s sad becasue the Americans that believe this is the right thing will soon have a rude awakening.

Unfortunately the bailout bill has passed. Unfortunately not only for you, Americans, but also for us on the other side of globe. This much is obvious. Several large financial groups (families) have managed to bail themselves out of their own mess(es) through their lobbies in the administrative elite of the US. The people of USA will pay now. I have nothing against that: these are your boys, you pay for their broken windows, etc. What I object angrily is that these measures a) are camouflaged as a “help to the common people”, which is not true as commentators note time and time again; b) these actions skew whatever objective economic picture the western world may have left, and removes them people farther and farther from the “real thing that makes ones life worth the effort of living”. And in the case of poor Latvians, it give us so crooked an example of “proper governance” that it may finish off the remains of honesty in our government once and for all.

People of USA, if you really want to do good for the rest of the world, why don’t you go on a revolution against your elitist cliques and make them into “mind-their-own-business” folks?

Why didn’t we nationalize the banks like they did in the UK? That would have placed more confidence in the banking system by lender and borrower alike. “Bailing out” Wall Street, regardless of any spin one places on it, and will have lasting repercussions.
We have failed miserably. It would have been wise to listen to the EU rather than think that we have all the answers. The system simply cannot work without controls.

In the short term it will help, in the long term it will hurt. Corruption has won again as failed CEOs and executive get to keep their jobs, businesses, and millions of dollars.

How much failure are we going to take from our government?

Elections are coming up, it is time to elect out all those that rushed this important process, and elect out all those that voted for such a corrupt and reckless bill. When it comes down to it our government won’t help us everyday american citizens and we will have to help eachother.

The US Debt just got bigger. Oh well. It’s “just” 700 billion dollars (the equivalent of the cost of having the army stay about 2 months in Iraq). The only solution would have been to pull the troops, lower military spending, increase taxes (preferably the rich), control other expenses, and hope to soon see the debt shrink back.

But as such, we’re sending the message that the federal government will keep subsidizing greedy companies whenever they’re not competent to stay afloat by themselves.

And by the way, how can banks fail??? With the exception of subprime mortgages, they impose huge amounts of interest on loans, but only give back a small amount of return on our savings. Plus they drown us in bank fees. Yet they still can’t manage to survive? Let them fail! If the government is to rescue them, maybe we should have a non-profit national bank that’s owned and operated by the government.

Here’s an idea, why not give every Amercian 2 million dollars. They would in turn spend this and boost your economy. They could pay off their mortgages, buy that car, set up education funds, invest and best of all have money for those ridiculous medical costs you have. In any event the money would all go back into your economy AND there would still be $600 billion dollars left to pay off the banks. Everybody wins, especially the taxpayers and here’s a scary thought, if you really wanted to help your citizens and NOT help the banks, give everyone $20million and the pot is empty for the banks.

I am a Realtor in Santa Clara County in the heart of California.
I have seen at least a decade of rising markets. Back a few years ago lots of business changed, lots of business went to the realtor/lender that could do things I doubted would benifit the client, now lots of these buyers are losing the homes they bought. There is a real mess. I for one have been through the boom then the fall out of Reltor/Lenders coming into and out of the markets. I don’t know exactly how this will benifit sellers that are losing their homes, it is really hazy what exactly they are doing for the bottom of the housing issues, but I beleive the banks need more workers to manage the contracts they have not been able to get through. To eliminate the looming mortgages, these real estate sales need to be closed before the government can figure out who needs what.
Taking 3 or more months to close a short sale or even bank owned shows that theres a need for control at this level.
Denise Stuart
http://denisestuart.spaces.live.com

The working population world wide are going to suffer from the crisis now developing, myself included. As European, reading the debate in USA, it surprises me how very few of you over there are not able to see that it is the capitalism as such that is at the root of the problems, creating inequity all over, not at least in USA itself. Try to read The communist Manifesto and adapt its anlysis to the to day world situation. It also suggest the necessary solutions. Bailout is NOT one of them. Socialism is made a monster, but as Naomi Klein has exposed in her book “The Shock Doctrine - The rise of disaster capitalism”, capitalism has probably killed more people around the world that socialism has.

Mauri

No, it will fix the economy in the short term, and also long-term if the “investment” is well-managed and ensured that it’s used for the purpose it’s made. This would of course involve a tighter regulation of the financial market.

No, I think moral authority is not lost as a beacon of capitalism, but, yes, it has been eroded somewhat. The question arises why this situation was not foreseen, even in the middle, when those bad loans were being made and there was no intervention made?

Yes, of course the legacy will linger as it’s no ordinary government intervention. It should be ensured that this legacy serves as a lesson for the times to come as it’s not easy to bear the costs of such intervention more than once in a generation.