What now?

29 Sep

Hmmm, so they said no to the $700B bail out. What now then? Quite scary seeing those share prices fall – and that’s just the American market. When Asia opens in a few hours and Europe opens in about ten hours I think we are going to see major share tumbling. I think tomorrow is going to be a bleak financial day.

I hope they sort this out. I have one thing that is ticking me off though. Predictably enough Democrats and Republicans are blaming each other. The Republicans claim it was the Democrats fault that the vote did not go through. What planet are they on? The voting results were 205 to 228, with 140 Democrats and 65 Republicans voting in favor and 95 Democrats joining 133 Republicans against. Do the math republicans 133 of your guys voted against it – you fluffed it up.

To be honest, I don’t know if I’m for or against this bail out. It seems like a whole heap of money – in some ways they might as well just throw in another ten billion to deal with world poverty at the same time – you know what’s ten billion when you’re dealing with hundreds of billion? I think a lot of the companies being “bailed” out have got their just deserts. They’ve been greedy. Some have continuously offered credit to people who they know can’t really pay it back. Part of me wants their CEO’s to suffer and maybe have to give up their jet setting lifestyle. Why should the tax payer have to fund that?

At the same time I realize that if some of these companies do go down then the people who will suffer the most will be the likes of you and I who are simply trying to make ends meet.

There needs to be real wisdom in this whole thing and accountability. What do you think? Are you for the £700b or against and why?

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7 Responses to “What now?”

  1. Jim September 29, 2008 at 22:09 #

    Lyn,

    Per your number in the last paragraph, I’d be really against a £700b bailout, as opposed to being only mostly against a $700b bailout. :o)

    That aside, the more I’ve thought about it, the more I’ve read about it, the more I think there’s got to be other, better ways than the so-called “Paulson Plan” and its slight makeover under the “bipartisan” wrangling over the past few days. And 700,000,000,000, regardless of which currency symbol is prepended to the front of it, is a very big amount of money (well, unless you live in Zimbabwe). About $200b more than what’s been spent on the war in Iraq to date, for example.

    So, will the economy collapse without something in place? We may get to find out. But I am glad to see the original Paulson plan dead, and I am not too upset that the modified one went by the wayside, too. I don’t know – I am not a pure free market fanatic, but at some point there has to be some pain in all of this. I say that working in the financial sector myself, and may live to rue that statement.

    And bravo! You wrote that like a true Canadian complaining commenting on affairs in the U.S. The Canadian immigration authority must let you guys in now! You’ll fit right in! :o)
    [That was a JOKE!]

  2. Jeff McQ September 30, 2008 at 00:19 #

    The reason the Republicans are blaming the Democrats is that the D’s have a majority, and could have passed this bill without them. It was kind of understood that the R’s would be opposed to expansion of government like this, and the few who voted yea were reluctant. (Plus, it’s been spun here in the news lately that the R’s are to blame for holding the bill up, even though they are a minority in Congress and really could not have stopped it if the Dems were committed to it. The fact is, the vast majority of Americans were opposed to the bill, and it’s an election year. The Dems didn’t want to be held entirely responsible for the bill passing for fear they’d lose their clout. It’s stupid, I know. So that’s that. 🙂

    My opinion? Mixed. I lean Republican and do not want big government spending, especially with a bailout like this, but I’m unsure yet if the alternate plans being talked around would prevent a meltdown. It’s kind of like this whole thing came to a head after bad decisions going back more than a decade, and now that this is on us, no one wants to spend that huge a sum–but not sure what else can be done.

  3. lynhallewell September 30, 2008 at 13:59 #

    LOL Jim! Can you go and promote me to my visa officer? 😉

    Seriously though, these affairs in the US are affecting the rest of the world in a big way. They say here that when the US sneezes the world catches a cold – and that is very obvious at the moment. So many banks are interlinked internationally that when one fails it affects a lot of other ones. Insurance giants like AIG have international customers. It is a real ripple effect. All eyes are on the US at the moment, especially with this election coming up. The international community know who they want to win …..

  4. lynhallewell September 30, 2008 at 14:03 #

    Thanks for clarifying that. I’m still confused though as you have a republican president and he suggested this package and has been on television pleading for people to accept it, so why did his party not back him? If a handful more republicans had voted for it then it would have passed.

    I do agree, bad decisions have been happening for a while and I wonder if more was done sooner whether this mess could have been avoided. Less than 12 months ago the US government was still denying that there was a problem with the economy – they must have known then that there was. I wonder if all of this economic crisis in the west is merely a result of greed?

  5. Jim September 30, 2008 at 15:00 #

    Lyn,

    There are lots of reasons the GOP rank and file rebelled against their party leadership (including the president, the House and Senate leadership, and their party nominee for president).

    1) George Bush is a “lame duck”, his time is running out, and as it does, his influence wanes even in his own party.

    2) Especially because he is now extremely unpopular and weighing the party down (IMHO, the worst administration of my life time and that covers a LOT of ground). If all signs are correct, the GOP is expecting to lose even more seats this fall, making that two elections (starting in 2006) in which they will lose seats/power. In fact, there are some signs it may be another “@$$ whooping”. So many of the Republican Congresscritters do NOT want to be associated with Bush at all right now.

    3) At least nominally the Republican party is supposed to be the party of smaller/limited gov’t. They’re really not – they just disagree with the Dems over which parts of the gov’t to grow. But there are lots of voters that still believe gov’t should be limited and the GOP sells to those people and some representatives realize that and voted accordingly.

    4) There still hasn’t been a good explanation (good as in neither the liberal nor conservative economists I read understanding it) as to why the Paulson plan would have worked beyond a temporary fix. And if it didn’t work in the long run, then what? You’ve just blown $700B down a rat hole and are not going to have many other options.

    5) Party discipline here isn’t as strong as it is in the UK. And in this case I’d say the “leadership” really poorly calculated the votes going in.

    6) Jeff is right – the Dems can’t be seen as this being just their plan. For one, it ties them too closely to Bush. For another, that would then let the GOP blast them for “big gov’t”. So it has to be bipartisan in a pretty meaningful way or it’s not going to happen.

    7) And the Dems had issues keeping their own members in line – 40% voted no. Because that money is going to put a damper on a lot of other initiatives that it could be used for. Of course, if the economy tanks, all those initiatives may be off the table anyway.

    It’s interesting times, for sure!

  6. lynhallewell September 30, 2008 at 15:13 #

    Very interesting, thanks for that Jim 🙂 I’m looking forward to learning more about American government next year in homeschool with the kids (homeschool has it’s perks!). I find the whole drawn out primary/election process very drawn out in the US. I get a bit bored of hearing about it – do you?

    Party discipline is quite strong here, although, like Bush, Brown is loosing ground and supporters fast. He certainly won’t stay in office at the next election (due 2010) and I’d be surprised if he even makes it that far. I can see him either calling an election next year or basically being ousted.

  7. Jim September 30, 2008 at 15:30 #

    I was bored with this election before it was even 2008. No matter who wins, we will lose.

    And when trying to understand Democrats and Republicans, it is always good to keep in mind the following quote by conservative humorist P.J. O’Rourke:

    The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn’t work and then they get elected and prove it.

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