More On Bailouts

Mar 22nd, 2008 @ 5:11 PM by Alden Smith

I see every day the rumble of folks all the way from Wall Street to the Hill calling for governmental intervention in help for people facing foreclosure.  Already, the Fed has provided a $30-billion short-term loan to JP Morgan Chase & Co. to facilitate its purchase of struggling Bear Stearns Company.  Even Presidential hopeful Sen. Hillary Rodham Clinton is calling for a new initiative to provide $30 billion to help homeowners.  Clinton’s campaign said in a statement that “If we can extend a $30-billion lifeline to avoid a crisis for Wall Street banks, we should extend at least $30 billion in immediate assistance to at-risk communities and families facing foreclosure.”  It does seem more than fair, doesn’t it?  Yet a bailout of people who have made poor choices is not going to sit well with taxpayers, especially at this point in our economy.

I am torn between agreeing and disagreeing.  I for one think that if we can bail out bear Stearns, then surely we can do something for all the displaced persons out there that need help right now.  The folks on the Hill had no problem bailing out Bear Stearns, yet sets tough guidelines for helping the homeowners in dire straits right now.  It hardly seems fair.

With the economy as it is, something will need to be done.  Things are going to hell in a handbasket, and very quickly.  Because I write about the mortgage market regularly, I find out things that I don’t even want to know.  Such as the scams against unsuspecting homeowners who have worked with conmen that took the money out of their equity in promise to bail them out of foreclosure, and then have disappeared.  Who is going after these bad guys, and who is keeping an eye on the Wall Street banks that are creating a comedy of errors?

I am all for private enterprise and a person making a buck.  It is the American way.  Yet when I see things happening to people as they are now, with no help forthcoming from the government, then I have to wonder just what is going on.  Certainly, they have gotten themselves into these messes.  But all the blame does not rest on their heads.  And it always looks like the people who have acted unfairly are getting away with the most.  Bear stew, anyone?