Wall Street (and Broadway) Bailout Bill
filed in Politics on Sep.29, 2008
There are few things I am less qualified to discuss than a government bailout bill. I’ve tried to keep track of everything, but when the talk turns to Mortgage Backed Securities and other numbers games my eyes glaze over. But there are a few observations that stand out:
1. Like most problems in modern day America, the average citizen thinks it has nothing to do with him or her. Every poll shows that Americans are against a “Wall Street bailout,” and the evening news lets angry citizens rant against rich bankers. What we seem to forget is that the problem isn’t really caused by banks. It’s caused by our failure to pay our mortgages. If everyone in America paid on time then the securities would be worth their original value. So enough of the whining and placing the blame on others! Unless you’re sitting on a 5.3% fixed loan with at least 20% of your house paid off then you’re part of the problem.
2. It’s difficult to blame the banks for their mistakes. Yes, it was caused by greed, but that’s the purpose of a corporation. Usually the goal is to make incremental wealth, but at times great risks must be accepted for the chance of massive profits. And the entire idea of risking an old, reputable company’s existence on mortgage securities isn’t that strange. It’s no different than a small business owner knowing he needs to expand to survive, only to collapse when he gets in over his head. You can’t ask corporations to make decisions with the world’s economy as the primary consideration. If they’re that big and important, and their terrible decisions can cause such ripples, then the government should be involved in order to control excessive risktaking.
3. In the end, the economic crisis is a result of philosophical policy decisions more than chance and bad luck. We created a government that allowed massive companies to take risks without proper regulation. We knew they had the power to damage the economy yet we believed so much in free markets that we trusted the corporations to control themselves. These were purposely chosen policies, consistent with Conservative economic philosophies, and they led to the current situation. That isn’t to say that Liberal policies wouldn’t have also led to an economic disaster, but it wouldn’t be this disaster.
4. I truly feel sorry for people close to retirement. Many of them share much of the blame (since, in my opinion, most government policies over the last twenty years have involved the high-voter-turnout elderly using their power to borrow money from their grandchildren that they have no intention of returning), but it still must be difficult to watch your 401K make no progress over the course of two presidential terms.
5. It’s the first crisis in my lifetime that forced me to take a deep breath and say, “Okay, are we okay?” Reasonable house with easily affordable loan? Check. Low monthly auto payment? Check. Resistance to high gas prices? Check. No credit card debt? Check. Dependable job? Check. Especially with two kids it makes you question and interrogate your decisions.
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I’m rooting for Arsenal because I like their attempt to win using youth instead of purchasing talent, they’re owned in part by Columbia’s own Stan Kroenke (not that I have much good to say about him, but that’s a different post), both Arsene Winger and the players seem classy (and Wenger doesn’t whine all the time like Rafa Benitez), they play completely positive attacking soccer, which makes them fun to watch, and they have a cool logo. Negative #1 is Nick Hornby’s Fever Pitch, #2 is that they don’t have a cool English name like Tottenham Hotspur, #3 is that they play in the ultramodern and boringly-named Emirites Stadium instead of a place with a cool name like Fratton Park, White Hart Lane, or Craven Cottege.