With the government bailing out the financial companies of our country, what does this all mean to us? Actually, I wish I had the answer. To me this is probably a mistake as we have become a reactionary country versus a country of sound principles. I'm a big believer in less government. I believe that captialism will provide most of the answers as it usually does. I know that if my company is having financial trouble nobody is going to come and save me. I'm going to drown with all my other small business comrades!
These companies are failing because they got greedy and corrupt. Should they be saved? The problem is that they control so much of our citizens retirement accounts and that's where the issue lies. That is why the government is bailing out these companies. However, if this has to be, then the people who run these companies should be held accountable for all the bad investments they made with our money. It was these people, out of greed, that made the decisions to make these dumb investments. Are they going to be able to continue to run these companies with no consequence?
As I said, I'm not a big believer in bailing out these companies but we are in a tough place. If we don't do it, millions of people are going to be financially ruined. If we do it we are saying it's ok to take risks that are going to hurt these same millions of people.
It's the same with all these investors who decided to walk away from their obligations because of their greed...but that's another story for another day!
Do you think the bailouts of the financial firms is the right move?
10 comments • Mitch Ribak • September 20 2008 09:31AMComments
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I agree with you- Where are all the profits they made in the past years- Is the govt going to do the same thing for oil companies if something like this happen- They got greedy and made millions now the tax payer is going to bail them out. I'm sure some of these companies have millions in offshore accounts.
It had to be done. I am from Texas and cannot say I am proud that Bush is a Texan. However, I think for once, he finally did something right albeit late. What happens in our markets influences and affects the markets around the world. If the all those good people (on both sides) running the government would have gotten this ridiculous notion that business doesn't need regulation out of their heads and had been looking out for the citizens of this country instead of themselves, we would probably not have ever been in this situation. Sorry for venting. Like you, I am unhappy about it.
I also wish they would stop calling these bailouts and start calling them loans. It's interersting that those in the inner circles get their way with our tax dollars and laws. Can you or I tried to call up the White House and said "hey, I haven't sold as many homes as I need to this year, can you send me some money?" Or better yet, refuse to submit to a subpoena. Try that sometime and let us know how it turns out.
K, I'm done. Thanks for letting blow off steam.
Mitch, I am certainly not an economist....but I think we were close to a crash and it remains to be seen whether it will avert and help us back to health....or only delay. We just have to all hope that it will bring some much needed help. Some say this should have been done long ago....and that it was the right thing to do. We'll always have both side of the fence and I like you am not sure who is correct. If do think your point is correct regards the greedy part and that it goes very deep. While we will be stuck....at least we have an economy to keep things going. Good question....for sure!
The shame of it all is that few people saw it coming, or even cared in 2003-2004. People were buying houses with neg am arms, banking on the appreciation of the home outpacing accrued interest.
Fannie and Freddie needed the bailout. Bear Sterns no Lehman no and AIG needed a bridging loan until the company could be sold. So I am against bailouts. This is WELFARE except we are not talking about checks of a couple of hundred dollars
I agree with Charlie. Bear Sterns, Lehman and AIG got greedy. I heard last night on talk radio that AIG is owned largely by government people (I can't remember if it's Senator's or not) but 58% owned - is that crazy? Now the tax payers are going to foot the bill? Hmm... there is something wrong here.
What are the alternatives? How could this be handled in another way without the market crashing and higher unemployment? I'd love to hear another solution so I can choose instead of "it is what it is".
Rule #1 is to avoid a serious depression at all costs. It doesn't need to be fair, just avoided at all cost. AIG is now owned by the government for the most part. The rich stockholders got burned hard here. Fannie and Freddie will just propped up until things get better.
It's expensive and seemingly unfair, but necessary nevertheless.
I think the issues are so interlinked, and globally, that there was basically no choice, here. The "immediacy" of information in the internet world means no "thought time" between events, and this "breather" may allow significant change, for the good. At least it might allow some proactive thinking, and not just reactive jumping.
Hi Mitch,
The problem with saying that "the market could crash" if the government did not do something is that the prediction is being made by people with a vested interest in the government doing exactly that. Still, as much as I hate the idea of the government beaucracy growing even larger, in this case, I honestly am unsure if the alternative would have been better.
I do believe, though, that any sort of government involvement should be tied to accountability for the people who created the situation. Sadly, those are the same people who make the predictions and decide whether to intervene or not. In other words, aint gonna happen.