Well, it seems like a majority of the American people (or at least those who badger their Congresscritters) want the bailout deal to fail, and are prepared to accept the risk of a major financial meltdown. There are various reasons for this. Some of them are offended by the very idea of state involvement in business; some of them are dancing in the streets over the “death of Capitalism”; and some of them just think that watching bankers jump from skyscraper windows would make great reality TV. But all of them have one thing in common: they all think that someone else will suffer, not them.
They are wrong. We are all in this together.
Today, I suspect, will be “flight from hedge fund day” on Wall Street. Like some high-interest deposits, hedge funds have rules about when you are allowed to withdraw your money. Today is the end of the month, and there is going to be a rush of people desperate to put their money into something that isn’t going to fall in value. Share prices will probably continue to nose dive. And this is all going to be bad for a lot of small businesses and start-ups. It will, I suspect, be particularly bad for the renewable energy industry, which was just starting to attract investment interest in a big way.
Over the next few weeks the effects of this will start to play out in terms of companies failing, loan rates rising and jobs vanishing (not to mention huge drops in the value of people’s pension plans). So come November there will be a lot more frightened and angry people out there. Being human, they won’t want to accept any part in the problem themselves, they will be looking for people to blame. We have, I think, been here before, in the early part of the 20th Century.
The way forward for McCain and Palin is now abundantly clear. They can’t profess to be able to manage their way out of the crisis. No one will believe them. Nor can they afford to be saddled with the blame. So they need to find scapegoats. It will be all the fault of the metrosexuals in places like New York, Boston, Los Angeles and San Francisco. They are all secretly gay, Communist, Muslim, friendly with foreigners and sympathetic to immigrants. And a lot of worried people are going to lap this up. We will see a lot more events like this.
It’s happening already. I’ve seen comments from right-wing nuts saying that the problem can be laid at the door of banks who were encouraged to lend money to “immigrants and homosexuals”, as though those two groups are somehow the only people ever to struggle paying a mortgage.
Lo and behold, a quote from one Mat Staver: “Companies that promoted anti-family policies have learned the hard way that such policies are bankrupt. K-Mart learned its lesson several years ago. Washington Mutual and Wachovia, both of which actively promoted the homosexual agenda, have come to realize that anti-family policies will bankrupt the bottom line.”
Well yeah, they can be expected to say things like that. The difference here is that people are going to believe them because they so desperately want someone to blame.
Paulson did a crappy job selling the bailout. Saying “I have no data point so I just picked a really huge number” does not inspire confidence in anyone. Not making banking executives give up their golden parachutes as a condition of being bailed out of the situation they wrought was also a mistake. The fact that it offered no help to the little guy who was being foreclosed, nor his neighbors who were seeing their property devalue as a result didn’t help either.
An even bigger mistake was not explaining how this was going to “trickle down.” For instance, at this point, I would assume anyone in the banking industry is trying to cut down on their own personal savings given the precariousness of their jobs. If you have say, 40,000 people in an office building who are now brownbagging it rather than buying from the pushcart on the corner, the pushcart guy (or the company the pushcart guy works for) will pretty quickly go out of business. 40,000 people buying $5.00 lunches every day is a fairly large amount of cash that’s no longer being spread around. And those same people are no longer eating out as frequently and are potentially firing nannies and maids and taking the subway rather than taxis. It does all start to add up.
I agree with cathy; the reason I was against the bailout was Not making banking executives give up their golden parachutes as a condition of being bailed out of the situation they wrought was also a mistake. The fact that it offered no help to the little guy who was being foreclosed, nor his neighbors who were seeing their property devalue as a result didn’t help either.
It isn’t that I wanted to see bankers squirm so much as I don’t think giving them a free pass to screw up all over again is terribly helpful; $700 million now, and then another bust in 5 or ten years? And that’s $700 million we don’t HAVE right now anyway, what with the federal budget deficit and the lovely state of our balance of trade. It also didn’t help that conservatives are trying to use this as an excuse to deregulate further, when rampant deregulation is one of the things that got us into this mess. It also doesn’t help that we’ve got some Eccleston effect going on . . . if you look at where real wages are and how they haven’t risen with inflation adequately, that’s not going to help.
Just my 2c. This situation has encouraged me to educate myself, and I just keep seeing more of the same . . . folks looking out for #1 and screwing us all in the long run. If I thought a bailout would help, I’d gladly put money toward it. But I am unhopeful, to say the least.
This is like using toothpicks to splint a broken leg . . .
As for the “trickle down” . . . that posits that the current pyramidal structure of American society is a good thing. Hmm. I’ll spare you my socialist rant.
But yes, it is typical. When hard times happen, some people look for scapegoats, usually anyone who is different from them. It sucks and we will see more. What makes me livid is that apparently the cops claimed the attack on the mosque wasn’t a hate crime. WTF?