Gregory Franklyn(18) GLFranklyn Log in to become a member of Gregory Franklyn's Fan Club!
I've been mulling over the Wall Street Bail-out for a while now and I'm reasonably certain that I've collected my thoughts well enough to comment. I want to preface my comments by noting that I am not an economist and that will likely become apparent somewhere in my 3rd paragraph or so. I had to do a bit of research to get to this point and learned some interesting things about money along the way!
I disagree with the bailout and here is my argument against it; Our current system of currency was originally valued, or more appropriately, "
Backed By" a financial equation tied directly to ownership of Silver and gold and its market value. Later it was tied to the ownership and value of Gold alone. Then, over the course of most of the 1900s the value of currency in the US went on and off the gold standard as pressures on the price of gold bounced around because of such things as World War II, The Stock Market Crash in 1929 and a few other dark periods in our fiscal journey. Since "Black Friday" in 1929 the value of your dollar has been only tangentially connected to a physical object. Since about 2004 the value of your dollar is based on the anticipation of your productivity and almost all other currencies used in the world today are tied to the value of the US Dollar. In short, your currency is based on imagination. It is fiction!
This little scan of history is prologue to my first point about this bailout of Wall Street. This economic crisis may be just like our money, fiction! My suspicions were put on "Red Alert" when the Bush Regime announced that our economy is in "Crisis" and that all of our collective hopes and dreams will go down in flames by the end of the week if we don't give Wall Street 750 Billion Dollars right now, TODAY! It sounded like extortion to me. "You don't have time to think about this, write the check right now or you, personally, will spend your golden years in abject poverty!"
Whenever the Bush Regime tells me I have to act fast without thinking because the sky is falling right this minute, I get suspicious. These guys are polished versions of the hustlers that mine the streets just outside the door of the homeless shelter I work at. I hear that stuff every day! That's how we got the War in Iraq, which is partly responsible for this economic disaster in the first place, but that tactic also brought us The Patriot Act, which dismantled a good portion of our very Constitution! I tend not to trust the Bush Regime, particularly when they are in a hurry. They lie too much.
Besides, how did these miscreants not see this monumentally huge disaster coming before now?
So, The House of Representatives rejected the demand, as well they should. It was simply a grab for power and the largest single transfer of money in the history of the entire planet, over to the Bush Regime, of all people! The Stock Market had a momentary tantrum about it, so The US Senate gave it to them. Only this version included an additional 150 Billion dollars of pork for the people who voted for it. So now the total is one TRILLION Dollars.
What did the House of Representatives do with this even larger bailout? Yes, of course they passed it!
Take a breath for a moment while I try to help you conceptualize how much money that is. My calculator doesn't go that high, I had to do the math by hand on a full sized sheet of paper! If you were to gather together One Trillion Dollars in $100.00 bills, you could remove every stick of furniture, empty all of the closets and cupboards to make room and hire a physicist to supervise the move, that many hundred-dollar bills simply would not fit in my apartment. Unless you're one of the people we're turning this amount of money over to, they wouldn't fit in your house either!
We are talking about One, followed by 12 ZEROs. We are giving that much money to the very same people who caused this disaster to begin with! Who pays it?
You guessed it! And what, pray tell, do you get in return for this insane amount of money? Well, that's kind of a gray area. Maybe you get it back and maybe you don't. It depends on a lot of things. That just doesn't sound like a good deal to me, and it IS my money, yours too!
Propping up unscrupulous corporations is a bad idea because they are unscrupulous! Case in Point, AIG executives spend $400,000.00 of that bailout money to take a vacation to an exotic spa and get massages and now we hear that they have another trip scheduled for the very same pampering. When I get stressed out, I take a nap or meditate or listen to some pleasant 80's pop music really loud, when AIG executives get stressed out, they spend a half a million dollars of your taxes on spa treatments.
Unprincipled business strategies will continue, because we are paying them to continue. This bailout has removed the consequences of bad behavior. We had a perfect opportunity to turn a corner in our financial markets and teach the bad guys that such tactics lead to self-destruction. We had the chance to make principled business practices "cool" again while those who do not wish to follow the rules of decency perished, motivating those who remained standing to re-think those errant strategies. But we passed on it by falling to the grip of fear!
The second issue for me is that we have become a "Credit Society". We live beyond our means as a matter of course, expecting to have the resources to pay at some point in the future. I got caught up in it too. I ended up losing everything including my home and my car and eventually filed for bankruptcy.
The difference here is that I learned something from this unfortunate lapse in judgment because I had to suffer the consequences of my actions. Removal of those consequences is the very thing that gave those AIG executives the balls to use their bailout check to take a lavish vacation. They clearly don'
t understand that actions have consequences because those consequences have been extracted from the equation.
Back in the day, thinking that the future held promises of more money to pay for the credit I was using now made a little bit more sense than it does today. Back then, you got a job that paid a living wage for a family of 4 and held that job for life. In exchange, the company you worked for rewarded you for your life of service by providing cost of living increases on a regular basis that increased your spending power and topped it off with a secure retirement income and a gold watch to boot. Today, NONE of that is true!
Credit was originally created to handle large expenditures everyone expects to have in a lifetime, like a home and a car. Gradually over the decades it evolved into tool for instant gratification of our every desire, all being made available to us at a profit by lenders all too anxious to encourage us to "Buy Now" and pay "Later". Today, "Later" arrived! All of those trillions of dollars in profits over decade after decade are not enough to sustain Wall Street any more and now they want the largest transfer of wealth ever imagined by the mind of mankind.
Our response to this credit disaster? More Credit of course! At some point might it not dawn on us that maybe this isn't such a great idea after all!
I believe we are doing ourselves a disservice by not examining our use of credit at all levels and making sweeping changes in how ANYONE, individual or Corporation, should use, or offer it. Don't get me wrong, credit is still a good thing only, and I can't stress this enough ONLY, in disciplined principled moderation. As a nation AND as individuals, we haven't done that in 50 some odd years that I know about, and probably longer.
The combination of our insistence on immediate gratification of our every desire, coupled with unprincipled greed in lenders who feverishly encourage us to do so, created the mess we are paying for now. I can only hope we, as a nation, have learned something from this. Judging from our rich and tumultuous history, forgive me if I don't hold my breath!
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