The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new. Bankruptcy punishes those who took excessive risks while preserving those aspects of businesses that remain profitable. In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. Talk of Armageddon is scaremongering. – Jeffrey A. Miron, senior lecturer in economics at Harvard University
The crisis is now so pronounced that doing nothing is not really a viable option. And what infuriates me to no end is the refusal by some members of Congress and taxpayers to recognize that the consequences of doing nothing will mean more economic hardship for all Americans. There are a lot of companies that have either already collapsed or are nearing the precipice of failure as a result of the credit crunch . . . and many of them are located far from lower Manhattan. That means many jobs are on the line and they aren’t just the jobs of traders. Fears about more bank collapses have also led to chaos in the credit markets as banks are afraid to lend to each other, which makes them less willing to extend credit to businesses. That, eventually, will be felt by consumers. – Paul R. La Monica, CNNMoney.com editor at large
52 Comments
How does the McClatchey company of California fit into this picture?
Considering our currant standing in the world and the fact that we’re stuck in two wars, allowing our economy to fail would be totally irresponsible.
“Bankruptcy means that shareholders typically get wiped out and the creditors own the company.”
Screw the shareholders.
Heh JR. Except when the creditor is the american taxpayer. Then? The creditors loan and lose, with no ownership.
And.. WHY TF did all the goodies have to be christmas treed onto the bill. Congress critters need to be BRIBED into doing the right thing? Or bribed AWAY from doing the right thing?
This bill should be defeated just because all the pork was tacked on. Until the senate can send a “clean” bill to the House, or vice versa, I hope the nays stick with it.
But I bet they all fold like cheap lawn chairs today, saying they are biting the bullet and doing the right thing.
Yeah. And the first vote was just grandstanding?
I see.
I also think the reason so many voters are against this bailout, and make no mistake, it is a bailout, not a rescue, is because no one, and I mean NO ONE has given any reassurances that this bill will make things better, keep them from getting worse, or that it is ANYTHING other than a thinly veiled raid on the public treasury for the benefit of “bidness”.
Voters may be dumb, but once they’ve made up their minds, it’s hard to change what’s in their hard and pointy little heads!
This pig refuses to even put on lipstick!
All this doom and gloom talk is being used to scare people into doing something they shouldn’t. I say let them go bankrupt. Private equity will step in eventually and fill the credit void. Congressmen and representatives of this country should listen to the will of the people and do what the majority wishes, and that is to NOT bail out these wall st carpetbaggers. The whole basis for a democracy is that there is inherent wisdom in the will of the people and our elected officals should pay heed to this thruth.
Nobody really knows for sure that this crises will end in financial disaster. Anybody who tell you any different is a bald faced liar!!!!!
And the republican leadership gives us the REAL reason they are so hot to pass a baiout bill so quickly…
“”We need to get it back to the middle pages of the Wall Street Journal instead of on the front page of every paper every day,” said Missouri Gov. Matt Blunt, a host here, of the economic crisis.”
Sweep it under the rug. Move along folks, nothing to see here… except… now almost $800 billion of YOUR money going to bail out rich guys on Wall Street.
Move along. Nothing to see…
And, when the creditors are other firms it could cause a bankruptcy domino effect.
While I completely disagree with ‘rewarding’ those who acted in bad faith, I clearly do not have the economic knowledge/education to be able to second guess the people who are advocating this. Personally, I just hope my taxes don’t have to go up a lot more to pay for it all.
In any event, we can all rest easy because, I have it from good sources “The Rich pay the vast majority of taxes” so when it eventually comes time to pay down the deficits, the rest of us can sleep easy.
BillyY, true.
This is economic terrorism at its worst. Like yelling “fire” in a theatre.
If there was evidence that these folks would be prosecuted, then maybe…
But everyone gets off but us.
We’re going to take it dry, no lube, no kiss.
Go up a lot more?
Huh?
We’ll be paying TRILLIONS for this and TRILLIONS for wars that don’t end.
We’ll be lucky if any of us can afford our homes after this.
And…well forget it. You are choosing to fall prey to terrorism.
The terrorists win. The United States of Al Qaeda.
Raptor, don’t worry about it, we have Repub. congressional leaders that Do Know Better Than the Vast Majority of Experts! And, their studies are based on what their partisan constituents believe.
Correction:
The United International States Bank of Chinese Al Qaeda.
The U.S. should declare bankruptcy on all foreign debt, do a littl reorganization.
Why has there only been one alternative given. Why is it “Give them 800 billion or the world will end”? There are countless other ways to handle this situation. Ramming $800 billion down our throats should be screaming red flags to everyone.
My Congressman votes my will. One of my senators did as well. The other one? Yeah lets wait until next election. Anyone who knows Sollie will be sick to death hearing how Levin screwed our grand children.
To Farmie’s point as well. Lets say congress does have a brain fart and votes for this crap sandwich. We’ve already dumped 600 billion on this problem. That’s right folks, 600 billion of your tax dollars have already been spent on this crap sandwich. How much has that helped?
Let’s review; Congress rejects the bill, the DOW gains. The Senate approves this crap sandwich, the DOW goes down. Hmmmm.
Who here wants to be the first person on their block to get a big juicy bite of this big ole crap sandwich.
Write your congress person. Email him/her. Call him/her and let them hear the voice of his/her constituents. If s/he doesn’t vote your will, vote his/her @ss out of office. Enough is enough.
Where does health care or education spending fit into all of this now?
Ah…the Global Carbon Tax. “The tax on breathing”.
Sol, I believe it was over $900 billion last week. Easy money rules!
And, y’all know I’m sure that there is more to the bailout/rescue plan than just mortgages:
http://money.cnn.com/2008/10/03/news/economy/credit_cards/index.htm?postversion=2008100307
So, included within the bill is authority to buy not only mortgage backed securities, but also securities backed by credit card debt and auto loans. As someone in the linked piece stated, “$700 Billion is just a drop in the bucket.”
“$700 Billion is just a drop in the bucket.”
So don’t drop the $700 billion. Though it is getting closer to 1.5 TRILLION.
Kick the damn bucket over. Let em burn.
The last depression, the world recovered in three years. The US? more than 10 years.
Reason? The damn socialist government with their fingers in the mix.
Like your mamma always told you, keep your hands to yourself.
Let America sting like a bit(h for the next year or two and be done with it. Or pi$s on the campfire and let this thing drag out for decades while your great grandchildren pay down (not off) the note.
This bailout will lenghten not lessen the pain.
Um, yeah. They need a bailout. Because the assets of these “worthless” banks are so worthless…
…citigroup and wells fargo are FIGHTING over who GETS to take over Wachovia. And the FDIC is fighting for the deal that requires YOUR money. Not the private sector only deal.
http://news.yahoo.com/s/ap/20081003/ap_on_bi_ge/wells_fargo_wachovia
citigroup and wells fargo are FIGHTING over who GETS to take over Wachovia. And the FDIC is fighting for the deal that requires YOUR money. Not the private sector only deal.
======
Exactly! Let the market work, it will weed out the idiots. Painful, yes. Worth it long term, yes.
Let em’ burn.
Ok cons, here’s your chance to stick it to California.
http://news.yahoo.com/s/nm/20081003/us_nm/us_california_loan
Coming soon to a state near you…
Burn baby burn. I got my hot dogs and marshmallows ready.
Bush “If we don’t have a bailout by Friday, the world will end!!!”
Bush “OK by Monday then…”
Bush “OK, Next Friday…”
Bush “OK, for sure Monday then…”
We’re still standing. Hmmm, let’s just keep waiting for “Next Monday”
ksfarmgrrl
Posted October 3, 2008 at 10:25 am | Permalink
Ok cons, here’s your chance to stick it to California.
——-
I would say ‘Let em’ burn’ to Cali, however they do pretty good by themselves…..forest fires and all.
From Farmie’s link…
“Absent a clear resolution to this financial crisis, California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal treasury for short-term financing,” Schwarzenegger wrote in the letter, according to the paper.
Uhm… OK? How bout you cut FREAKIN SPENDING @sshole.
That what you’re lookin for Farmie?
SolDevVB
Posted October 3, 2008 at 10:26 am | Permalink
Burn baby burn. I got my hot dogs and marshmallows ready.
Bush “If we don’t have a bailout by Friday, the world will end!!!”
Bush “OK by Monday then…”
Bush “OK, Next Friday…”
Bush “OK, for sure Monday then…”
We’re still standing. Hmmm, let’s just keep waiting for “Next Monday”
======
I will be cookin’ some ham n’ beans via dutch oven….mmmmmm…and some corn bread…
Well sol, I was really thinking that the feds have been pushing down debt and spending to the states, and they push it down to the county and city….
And the whole house of straw, er cards (thanks MH) is going to fall not only on the federal level, but the state level, and then the locals.
We’re gonna pay for the republican hangover over, and over, and over and over….
BTW, KS credit rating is only slightly above CA’s. And Texas is looking to lay off thousands of state employees due to lack of budget.
Like I said, coming soon to a state near you. Since, to loop in Anti here, the hambone’s connected to the knee bone, connected to the foot bone, connected to the toe bone….
And all these little towns out here that depend on government jobs and schools?
heheheh.
toast.
Once we start down the bail out bunny trail, we’re gonna need bailouts to bailout the bailouts.
ksfarmgrrl
Posted October 3, 2008 at 10:34 am | Permalink
Once we start down the bail out bunny trail, we’re gonna need bailouts to bailout the bailouts.
——
I say shoot the rabbit before he hits the trail.
then make key chains out of his feet…
… and hobo, er, rabbit stew in the dutch oven?
Let’em eat chickens… Drives the price up….
We already have more government than we can afford. Restructuring and downsizing is encouraged.
Damn straight. Let this be a lesson. We are a federation of states. The founding fathers fought and died to get us away from the British Government model. And what do the @ssh0les like us do? Every damn thing we can to duplicate their model.
OK, so states, counties, cities, townships and villages fail. Good. Damn good. Burn it down. Burn the f_ucking ashes.
Then we can start anew. Villages independent of cities. Cities independent of counties. Counties states. And the best, States independent of the federal strangle hold.
Build this back the way it was meant to be.
Cool. Let’s start then, with NOT bailing out wall street so states and locals can commence with the layoffs.
‘course that means nut boy’s holdings in the stock market will be worthless, but hey.
They also serve who stand and wait.
SO.. sol.. I’m guessing then the trains WONT be running on time? The fire house, hospital, school, etc. will all be closed?
What about nut boy’s municipal golf course?
Uh oh. I bet he draws the line there.
I’m ready for a fargin’ Tea Party.
JMWalker
Posted October 3, 2008 at 11:14 am | Permalink
My comment is awaiting moderation. I guess I’ll have to skip the next round.
SO.. sol.. I’m guessing then the trains WONT be running on time? The fire house, hospital, school, etc. will all be closed?
What about nut boy’s municipal golf course?
I can’t speak to your local issues but,
the trains WONT be running on time?
It is Amtrak. If they can’t survive without government funding… See YA !!!!
The fire house,
Local volunteers
hospital,
Privately held chain
school
Funded through property tax. Untouchable.
What about nut boy’s municipal golf course?
Sell that f_cker.
There has been talk in the House the if the bill doesn’t pass….yep, martial law.
Google it.
Tea Party indeed.
Lock and load. Or submit like the slaves we are supposed to be.
Rep. Brad Sherman.
http://www.infowars.com/listen.html
just listen today. Alex has these congress folks on today. listen for your own sake.
http://www.youtube.com/watch?v=HaG9d_4zij8&eurl=http://www.infowars.com/?p=5053
THIS IS IT. WAKE THE HELL UP.
It is done.
Our fellow Kansans held strong, it looks like.
SEC. 117. CARBON AUDIT OF THE TAX CODE.
(a) STUDY.—The Secretary of the Treasury shall enter into an agreement with the National Academy of Sciences to undertake a comprehensive review of the Internal Revenue Code of 1986 to identify the types of and specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions and to estimate the magnitude of those effects.
Pretty much wraps it up…
http://www.youtube.com/watch?v=A0xOwHa2zls
A friend of mine at work the other day told me, “We’ve GOT to bail them out! If we don’t, the economy will crumble!”
My reply: “Just who are the people who said this at the beginning? The very people who would benefit from such a bailout. Also, what’s to keep the scumbags on Wall Street from taking the money and doing the same thing again in the hopes that it would work the NEXT time? Or of taking the cash and going on the lam with it? You don’t really trust them, do you?” I reminded him that the bank which holds his mortgage was one of those that collapsed.
No answer.
Welcome to economic martial law. Thanks guys. We’ll still get fu$#ed.
Terrorizing Congress into passage…get ready for HELL.
It’ll just take another war to fix all of this…
Welcom to the USA – Union of Socialist Americans
“This bill provides no assurance that we will not be faced with this financial crisis again because it falls short in reforming the underlying problems, like anti-regulation fanatics like me.”
- Todd Tiahrt (with this writer’s embellishment added to provide additional truthiness) on his vote to let the econmony sink further into recession because he’s too afraid he’ll lose his job if he does the brave and right thing.
Need I remind you all that the people who lost everything in this mess were the ones with the small retirement funds and 401K’s? And that Congress just bailed out the people we trusted to invest our money safely, but who played fast and loose with it? They’re saving the asses of the ones who lost other people’s money instead of those of us who got screwed by them! Oh, the power of the lobby.