Wednesday, September 24, 2008
Rumor is that the Paulson plan is dead and the Dodd bill or some variation is a foregone conclusion.
Ah, now the media are calling it a "rescue plan." Poor victim investment banks.
If this passes, you will be paying for the rich bankers' mistakes and losses while they enjoy their enormous profits. More inflation will further erode your buying power. If you disagree with this, contact your representatives and complain. The fix is probably already in, but it can't hurt:
Link to Congress.org
I hope that if a plan passes it works, but I'm not betting on it.
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2 Comments:
Jim Cramer supports the bailout and believes without it, we will go into a depression.
I think he is just neurotic enough to be credible.
Besides, the corporate executives are already rich. They would fare better in a depression than the rest of us. The bailout is about stopping the domino effect of disastrous consequences that would hurt average Americans more than those CEOs.
Patricia A.
Jim Cramer is a very good entertainer and a very smart guy. He's also part of a very rich and exclusive Wall Street crowd. I don't think he necessarily has the best interests of this country in mind.
Word is that this plan has actually been around for months. Paulson et al waited to foist it upon us until Congress was ready to recess to get it rushed through without due consideration right before the election.
I am skeptical that printing a lot of money will magically prop up house prices and avert financial disaster. House prices, especially on the coasts, are too high and have to come down sometime. The Fed may be able to put off the downturn in the natural economic cycle, but it will come sooner or later, and the more it is delayed, the worse it will be.
It's obvious we have a liquidity problem that must be addressed. There are a lot of proposals out there that involve more than just printing money and forcing Americans to buy bad investments for which no one has been able to set a value.
The newest sales pitch is that this plan will make Americans tons of money. Ok, then why isn't all the private money out there trying to get in on it?
It appears that the revised plan is a little better, (i.e. oversight, transparency, judicial review,) but the underlying premise of printing money to put off a downturn until after the election is still bad. The inflationary effect will negate any positive effect of additional liquidity.
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