Smart Borrower Blog

The Financial Industries’ Bailout

Sep 22nd, 2008 @ 3:38 PM by Alden Smith

All day long, I have been getting emails from political action groups such as Democracy For American and True Majority urging me to call Senator Levin to put a stop to the new proposal to bail out Wall Street banks.  I have spent a lot of today reading both sides of the issue, and I am convinced that in the end, American taxpayers are putting an awful lot of cash on the line.

This would be the largest bailout in history.  The White House tells us me must do this to avoid economic collapse.  I think that this is a very real concern.  What I am concerned about, however, is the fact that there will be no regulatory oversight on Henry Paulson, who is behind the plan.  The Secretary of the Treasury is not an elected official, and really answers only to Bush.  If the White House makes this move as it wants, Paulson will be the most powerful man in the United States.  Congress, to their credit, doesn’t much like this plan.  Neither do I.  Bush has sent down word that there should be no interference in what Paulson does, or any action taken that might hamper this effort.  This would mean that Congress would have no say about the very many golden parachutes that will surely pop open if this happens.  To my way of thinking, by doing so we would be rewarding the very people that have put us in this mess to begin with.  A lot of Congressmen think the same way.

It is obvious that something needs to be done.  Congress will be going into recess for the election, and this is something that can turn into a monster overnight.  An analyst on the NBC Nightly News said that on last Thursday we came very close to a collapse.  He did not elaborate, but I am sure his information is top drawer.  I have to wonder what is really being kept from the American people to have the government take such drastic measures.

It should be an interesting week.  The News reports that formal meetings will be held tomorrow.  All we can do is wait and see what will come of this.  It does not bode well for the American people, regardless of what action is finally taken.  I will follow up on the report on Friday.

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