Bailout

[David Farber <dave () farber net>]

Anyone want to bet on when the first major scandel happens. It will  
make Iraq fraud look like ameture day. djf


Begin forwarded message:

From: Brett Glass <brett () lariat net>
Date: October 4, 2008 4:11:19 PM EDT
To: dave () farber net, "Ip ip" <ip () v2 listbox com>
Subject: Bailout

Dave, and everyone:

It was blackmail.

This week, Wall Street successfully threatened Congress, saying, "If  
you don't pass a bailout plan that's designed to help us without  
helping Main Street, I'll plunge." And when the plan was first voted  
down, plunge it did -- by 777 points.

And so, Congress -- besieged by Americans who were legitimately  
worried about the fate of their stock market investments and lacking  
the will to draft its own bill rather than accepting a bad one from  
the Bush Administration -- passed a law which helps the fat cats on  
Wall Street, offering only a slim chance that any benefits at all  
would trickle down to the rest of us.

What Congress should have done -- but did not have the will or the  
savvy to do -- is tear up the bailout bill and write one that directly  
addressed the fundamental problems which brought about the current  
economic crisis.

Such a bill would have gone to the source -- bad real estate loans  
foisted upon homeowners by irresponsible lenders -- by doing  
everything possible to prevent the borrowers from having to default,  
thus salvaging as much of the value of those loans as possible. This  
would have helped both ordinary citizens -- by helping them to keep  
their homes and preventing a continuing downward spiral in real estate  
prices -- and the banks who held securities backed by those loans.  
Every homeowner -- whether a subprime borrower or not -- would have  
benefited directly from such a move. And while the banks who were left  
holding potentially worthless paper would have paid a fitting price  
for their recklessness as the terms of the loans were rewritten, more  
would have survived. We also would have avoided a catastrophic  
consolidation in the banking industry which is sure to hurt investors  
and consumers in years to come.

What will happen now? Fewer Wall Street firms will fail, but the rest  
of America will suffer -- and a substantial recession is likely --  
because Congress targeted the top of the financial food chain whilst  
ignoring the foundation on which it rests.

Voodoo economics, indeed.

Brett Glass
PO Box 1693
Laramie, WY 82073-1693
(307)761-2895
brett () lariat net





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