Cynical Synapse

Mon, 29 Sep 2008

Did You Miss Your Bailout?

Filed under: Business, Economy, Life, Politics, Profiteering — cynicalsynapse @ 10:20 pm

Look at everyone crying crocodile tears for the failed $700 billion Wall Street bailout! No one ever bailed me out of a bad loan decision. I’ll bet you never got a bailout, either

Let’s consider how we got into this crisis. In the interests of “less government,” regulatory oversight was relaxed or not applied to “innovative” financing. As credit became easier and easier to obtain, people bought—or rather committed to buy—more and more things at greater and greater prices. How else do you explain 3 and 4,000 square foot houses with 3+ stall garages, snowmobiles, quads, and all the toys? And lenders were only too happy to oblige, anticipating big returns on investment.

The old saying, “if it looks too good to be true,” came home to roost. You see, it wasn’t a housing bubble that burst. It was a greed bubble. Enron was the start; housing is the next victim because that’s the biggest investment most individuals make. I fault first the borrowers who went way beyond their means to buy more house than they could afford. But I also fault the lenders for taking far more risk than they ever should have and for getting as “creative” as they could to approve such loans, all in an effort to rake in ever-increasing profits.

Aimply put, the problem is greed! Personal greed for more stuff fueled corporate greed for more profit, which was just fine with stockholders whose greed wanted higher dividends. Now their damn house of cards is collapsing in the wind and they want the taxpayers—you and me—to bail them out. I say screw them all; I’m glad the bailout failed. There are alternatives that don’t suck the lifeblood out of the rest of us.

Congressman Mike Rogers said, “this is still the same bailout bill, written by a Wall Street guy with a Wall Street solution to a problem created on Wall Street.” Let the big guys feel some pain for a change. Similarly, Obama said, “It must not be designed to reward particular companies or the irresponsible decisions of borrowers or lenders.  It must not be designed to enhance the personal gain of CEOs and management.  The recklessness of some of these executives has helped cause this mess, even as they walk away with multimillion dollar golden parachutes while taxpayers are left holding the bag.”

The whole mess is not simple. Like Thoughtful Conservative said: more questions than answers.

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