700 Billion Dollar Bailout Fails
Sep 29th, 2008 @ 4:28 PM by Alden Smith
I received an alert today from the Washington Post telling me that the $700 billion bailout for Wall Street banks had failed to pass the House. It is pretty obvious that Americans have sent a message to the elected representatives in Washington. A recent poll online showed several days ago that 81% of Americans were against it, as well they should.
Because this is an election year, I think that most elected officials have listened to their constituency. With 30 some days to election time, I am sure that this 81% would vote with their pocketbooks, and we would see the officials who didn’t vote for their constituency long gone. Politics is like that, as it should be. There can be no damage control this close to the election. Senators and Representatives know that, and so voted for the people’s choice.
The feeling on Main Street now is not good. Consumer confidence is in the crapper, jobs are being lost, homes are being foreclosed on, credit is tight, and now they want to give away $700 billion dollars? Word on the street in this small town I live in is all the same. I spent an hour in my wife’s store asking customers what they thought of the bailout. A reaction that didn’t surprise me is people wonder where the government would get that kind of money in the first place. Just print more? Other reactions were this – we are spending $10 billion in Iraq a month on an unpopular war. Why do we now have to bail out the fat cats on Wall Street when folks are suffering in the trenches? No one I spoke with thought this plan was a good one.
I am the first to admit something must be done to stop the bleeding in the mortgage market. Bailing out Wall Street for their mistakes is not a good working plan, IMHO. There is no doubt in my mind that any citizen who made these poor judgment calls and got in a mess would end up biting the bullet. Uncle would surely not come along and say to me, “Hey, that’s okay. You used poor judgment, let us bail you out”.
So we end up getting what we have here today. The stock market took its biggest hit in history today, with over 700 points falling off the deep end. If we looked behind the scene, we would see people rushing to buy T-bills as fast as they could travel. I am sure even gold and precious metals did well today. It will be interesting to see how this plays out. We cannot keep rewarding bad behavior by throwing money at it. And that was what this bailout was all about.