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Much emotion has been expended on what has been labeled on the $700 billion “bailout of Wall Street.” Most of it comes from the very same ideologues of “liberal capitalism” and “trickle-down” economic theories that have led this country into this mess. What is their recipe for correcting the situation?
If we listen to the Republicans, both the Republican candidate for president and the ideologues in the Congress, it is one thing: “More of the same.” That includes lowering taxes for those very firms which caused the problem and even less regulation. However one labels those proposals, it is not only rewarding those miscreants, and allowing them to continue in their activities.
We not only should, but should all be furious that such action has become necessary yet, still recognize that action is required. Unfortunately, many cannot make the separation, allowing themselves to be guided by ideology and emotion rather than obligation and just plain common sense.
That is not helped by the cowardice of those members of the Congress who have not the courage to do what has to be done because they might not get re-elected. If that is the case, they do not belong in such positions. They do not deserve them.
Of course, if one wants to look at who is ultimately responsible, one need only look in the mirror. No, don’t look to the other person to do it. Look first at yourself.
Democracy has been described as nothing more than a mechanism by which people get the government they deserve. That is absolutely true. That is accomplished by electing those without courage to office. And that, in turn, is but a reflection of the lack of courage to be found in the electorate.
The problem in the financial system is nothing new. It has happened previously, and the causes were the same. It happened in England at the end of the 19th century, and in this country in 1929. Both are well documented. It is unfortunate that many choose to remain ignorant of history. Otherwise, we could have avoided creating the mess in which we now find ourselves.
The few remaining individuals still capable of “thinking”, instead of merely “believing”, have long recognized that we began the march toward this debacle three decades ago when we changed our real national anthem to a siren song of selfishness. The only remaining question is: Is there sufficient courage left in the electorate to change it back again?
ROBERT I. LAITRES
Delta
One Response to “Bailout means ‘more of the same’”
Posted October 1st, 2008 at 8:43 am Login to Send PM Report this comment
There is a better way out of this predicament.
http://www.daveramsey.com/media/pdf/the_common_sense_fix.pdf
The Common Sense Fix
Years of bad decisions and stupid mistakes have created an economic nightmare in this country,
but $700 billion in new debt is not the answer.
As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy.
Instead, I submit the following three step Common Sense Plan.
I. INSURANCE
a. Insure the subprime bonds/mortgages with an underlying FHA-type insurance.
Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
b. In order for a company to accept the government-backed insurance, they must do two
things:
1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance.
This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan.
In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance.
FHA does this now, and that encourages mortgage companies to go the extra mile while working with the borrower-again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages.
This keeps underperforming executives from being paid when they don’t do their jobs.
c. This backstop will cost less than $50 billion-a small fraction of the current proposal.
II. MARK TO MARKET
a. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages.
This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
b. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks-and it costs the taxpayer nothing.
III. CAPITAL GAINS TAX
a. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous-and immediate-liquidity in the markets.
Again, this costs the taxpayer nothing.
b. This move will be seen as a lightning rod politically because many will say it is helping the rich.
The truth is the rich will benefit, but it will be their money that stimulates the economy.
This will enable all Americans to have more stable jobs and retirement investments that go up instead of down.
This is not a time for envy, and it’s not a time for politics.
It’s time for all of us, as Americans, to stand up, speak out, and fix this mess.
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