Bailing the Titanic

If you haven’t heard, Congress is currently discussing a $700 Billion bail out of our banking and investment system. Or something like that. I honestly am confused on who gets the money, why they get it and how all this happened. I took economics in college, but I must have skipped the day we talked about government bailout strategies.

I do have a few observations and questions based on what I have seen and heard lately. If anyone can send me some good information about any of these I would greatly appreciate it. Here goes:

1. What is going on?

2. Why does Congress have only 2 options – vote today for the bail out as written, or apparently let the entire world economy collapse? Isn’t there any other thinking going on here? It seems our choices are either get screwed by investors or get screwed by our government. Isn’t there at least some other idea or plan? Call up that Numb3rs guy. He’s got lots of great ideas.

3. All I hear is “vote for the bail out. vote for the bail out”. There was a Senator on NPR yesterday saying basically that we are all stupid for asking our representatives to not vote for this. How about some reasons, facts, details, or information? Anything other than “It will be BAAAAAD, Hanibal.” Who voted Mr. T into Congress? Educate us, o smarty pants.

4. Speaking of voting, that senator also said that other representatives were voting just to keep their jobs, which I interpret as him saying that our elected representatives shouldn’t vote the way their constituents want them to. Huh. I thought that was their job? Isn’t their purpose to REPRESENT us in government? I could be wrong, but it seems he is saying that the people shouldn’t be allowed to have a say in what happens. Odd, but that doesn’t seem like democracy. I do understand that sometimes the people (who haven’t been told anything, see #3 above) may not understand the gravity of the situation, and a smart, educated, in-the-know representative may have to do what is right for the country instead of exactly what the people request. And those people may not be happy about it come election day, but that is the job you are in, guys. It is kind of like parenting. Sometimes you have to make a decision that your child doesn’t like because it is what is best for them. That doesn’t mean they will love you for it. If parents were voted into office, I’ll bet many of them would stay in power past age 6. My son is 6, and he’s tried to stage a coup 3 times already. Quit whining. And, just possibly, the collective wisdom of an educated public just might be better than the abstract thought of a highly paid adviser. Maybe. We’ve gutted most of the education system to pay for wars and corporate subsidies, so maybe that public isn’t as educated as they used to be.

5. Speaking of voting, how is everyone blaming everyone else for this problem? The Democrats are being blamed for the bill not passing, even though 2/3 of them voted FOR this bill, while 2/3 of Republicans DID NOT vote for this bill. Translation – the person who is pushing this bill, our President, who is a Republican, could only get 1/3 of HIS OWN PARTY to vote with him. The opposing party has often been known to not instantly vote for whatever 3 page, $700 Billion plan that someone floats, remember? That is the way it works. Checks and balances. If he had been able to convince his own team, this would have passed with flying colors.

6. I have heard Obama and Pelosi attacked for not showing “leadership” to get this bill passed. Huh. Lets think about leadership. Why is it their job to get this bill passed? Who’s plan is it? Shouldn’t that person show some leadership? Or how about the person who is actually the leader at the moment. Where is their leadership? What kind of leader says, “Congress needs to work this out” and then walks off? What kind of leader can only get 1/3 of the his best friends and supporters to vote for his plan? A leader stands up and leads when the rest of the group stands in confusion.

7. What are the horrible consequences we are talking about here? And if they are getting us back to reality, much like a “market correction” isn’t the bail out propping up a false and dangerous system, based on fabricated value?

8. How about John McCain? Only a few weeks ago, he was saying that the basic structure of the economy was sound, and now we are in a train wreck. What’s that all about? Don’t worry John, I’m not going to pick on you. You admitted that economics isn’t your strong point. But wait. If economics isn’t your strong point, why did you rush back to Washington to help solve this problem? Based on how far off the mark you were just a few weeks ago, you should really just stay out of the way, chachi. Let the big boys with those new fangled calculators get some work done. We do appreciate your attempt to lead (see #6), but a leader also knows when he has no clue what is going on. Then a leader’s job is to get out of the way and let people do their work.

9. How is W not getting any blame here? Clinton isn’t even in office and he is getting blamed. The public is getting blamed for accepting the bad mortgages we were offered by greedy banks. I swear we should coat frying pans with that guy and nothing would ever burn or stick. Strap him on the front of the space shuttle and reentry would be a cake walk. It’s like magic. He’s been the president for 8 years! 6 of them with a Congress that would do whatever he asked. And now he is saying it’s Congress’s fault? Again, leadership starts with “lead” (not the metal – long “e” sound) and has nothing to do with boats today.

10. What are the banks doing to help themselves? The should have some pretty sharp financial minds hanging out not doing much, maybe they could work up a few Plan B or C’s. Or maybe not, they are the one’s that got us here, right?

11. Conspiracy theory alert: Is this all a distraction so we don’t notice a build up in the Middle East? Or to make our economy so weak that we have to attack Iran? Sounds crazy, but so did attacking Iraq because we were attacked by a man from Saudi Arabia living in a tent in Afghanistan. We passed that one with no questions asked.

12. I’ve asked this before, but where is Dick Cheney lately? No peeps from the veep. Did he die? Or did he just climb inside of Bush’s body to save time this crisis period?

13. There is talk of raising the FDIC deposit limit to $250,000 to restore the pubic’s confidence in the banking system. OK. Thanks. That makes me much more confident. How many Americans have deposits that will be touched by this? This seems to benefit only very wealthy people who are set to lose a great deal if our banking system collapses. It’s important they feel their money is safe.

14. If the value of all these stocks drops, shouldn’t there be a drop in the pricetag of this whole bail out? I’m sure this is stupid, but economics isn’t my strong point. Buy low, sell high, right?

15. If forgiving debt to release credit is the solution, why not pay off the mortgages directly, allowing consumers to go spend that money elsewhere in the economy? The way the current plan seems is that the banks lose their bad debt, citizens who couldn’t pay and created the bad debt are still on the hook for the money, AND they have a truck load of public debt that they will have to pay off with taxes in the future. Seems like robbing a person, and then charging him for the service. But wait, that’s healthcare. I don’t want to get off topic.

If our economy is crashing because home values were artificially inflated due to easy credit, why are we basically subsidizing those home values so that banks can continue to provide easy credit? Isn’t that what got us here? That doesn’t sound like a plan. That sounds like stalling and waiting for a change of administration.

Again, these are just observations and questions. Any insight you could offer would be great. Send them too