Bailout blues

I guess it's not surprising that the people who buy into the theory that less government regulation allows the market to right itself feel that government intervention in the current mess is a misstep. We've constantly been told, from the Reagan presidency on, that a nonregulated market has its own checks and balances. The problem now seems to be that financial institutions have grown so huge with lack of government limits that a failure of one of these giants becomes a failure of the entire financial system.

In my opinion financial institutions that are too big to be allowed to fail are too big to be allowed to exist. I'd like to see the bailout include provisions for breaking these institutions down to a less dangerous size, and I'd like to see the same limitations apply to all financial institutions to limit future danger. Frankly, our grandchildren will be paying the price of our foolishness in dismantling all of the safeguards put in place by Roosevelt after the Great Depression.



Rewarding greed

We often drive through nice neighborhoods and wonder, "How do all these people afford these incredible houses?" They seem to be regular people, with regular jobs; and in their driveways are regular cars.

The answer is now clear: They can't afford them. Evidently there are millions of people who didn't understand that their mortgages could go from an affordable payment to an unaffordable, unmanageable one. But here's the kicker: If Congress finds a way to push this bailout package through, they get to keep their unaffordable houses anyway!

Forget the rest of us. We simply played by the rules. We had brains enough in our head to know what we could afford, and what we could not. But will we get a big, glamorous, unaffordable house with a government-guaranteed mortgage? Of course not. The rest of us will simply be stuck with the bill. We'll be stuck with the bill because of Wall Street's greed and because of the stupidity of millions of home-buyers.

And here's the other kicker: You know all those greedy Wall Street crooks and the stupid mortgage borrowers? They get to vote, too. Too stupid to manage their own affairs, yet they get to vote.



Show us the equity

Under Treasury Secretary Paulson's proposal, the government would agree to overpay for trash assets, thus bailing out banks at taxpayer expense. While I understand the arguments for such a taxpayer bailout, I believe it should be structured so that bank shareholders and bondholders take the hit and taxpayers have a chance of coming out of this mess whole.

Better yet, this bailout should be structured "The Warren Buffett Way" -- giving taxpayers some form of equity, warrants, and/or loans in these bailed-out entities instead of ownership of some new federal bureaucracy that is nothing more than a trash disposal service!



Explanation needed

The government has got to explain how this bailout will work with homeowners like me. If my bank sells my sub-prime mortgage to the government, will I start making my payments directly to the government? When I fall behind in my payments when my interest rate resets, will the government come after me with the world's largest collection agency, the IRS? This is Big Government at its finest! If this not how it will work, the politicians had better explain it to us more clearly.



What's the balance?

Should the government wait until the checks from last spring's economic stimulus package clear before writing any bailout checks or can we handle both?



Loss of confidence

While thinking about our current fiscal crisis, after figuratively stepping back far enough to see the larger picture, it seems to me that the collapse of our economy and the possible plunge into another Great Depression are most likely tightly tied to a wholesale loss of confidence by the foreign entities holding enormous amounts of our national debt. ...

With the acceleration in recent years of the negative impacts of policies that have encouraged us to live beyond our means, both as individuals and as a nation, it strikes me that these foreign lenders have already been concerned about our financial health and the lessened safety of their investments. The current crisis must have substantially increased their apprehensions about our leadership in this area.

If we hasten to throw huge added money onto this bonfire in an effort to save the fortunes of our wealthiest people and the greedy fools entrusted with the management of these major financial institutions, this will substantially worsen our overall national finances and it might (should) increase the alarm of these foreign investors.

If we take more time and very carefully explore the best way out of this mess, this might both reduce the total cost of any bailout/rescue and also increase the confidence of foreign investors that we might just regain our senses and begin the necessary practice of living within our means.



Spelling it out

Setting: Fifth-grade spelling class

Teacher: Nancy, how do you spell "incompetent"?

Nancy: C-O-N-G-R-E-S-S

Teacher: Right!