Congress failed. Again. The Bailout Bill will accelerate the Meltdown by misallocating funds and burning day light needed to address the underlying problems.
A three page travesty delivered by Bush became a 451 page travesty cum pork adopted by Congress. These votes may rank with the Gulf of Tonkin Resolution, the Iraq war resolution, and the USA PATRIOT Act vote.
The public saw a 1.1 Trillion dollar drop in the value of their investments/401(k) IRAs last Monday and seemed to believe that a 700+ Billion bribe was worth the gamble. The Bailout Bill will cost at least 1 Trillion to administer directly and will cause Trillions more in losses and damage. Bribing the big players not to pull the plug until after the election is over is almost criminal if not treasonous.
Few note that the current crisis will be made worse by this bailout/bribe. Beyond concerns about “moral hazard” and “bailouts for billionaires,” the problem is that the bailout is creating an even great credit crunch for the country. There is way too much money in the economic system in the wrong hands. The new money is being funneled into the wrong vessel, into a bowl not a colander. The money will be hoarded. The money is being not made available to the public.
Raising the deposit amount insured by the FDIC from $100,000 to $250,000 appears to offer something to the public, yet it also discourages the individual investor from monitoring his or her financial institution. Individuals are deluded into believing that everything is ducky. Individuals not just the government must act as regulators. Banks that will soon be taken over by the FDIC are offering much higher interest rates to gobble up as much money as possible before the collapse.
Consumer confidence has never been higher. Consumers are confident that the entire economic and political system is broken.
Business confidence has never been higher. Businesspersons know that they are lying and, of greater import, that all other businesspersons are lying. Reading between the lines of the economic reports is a challenge. Reading between the lies is vexing.
So many fought to declare and establish independence for this country. Last Friday, Congress voted to establish and fund a czar/dictator/central planner. Two hundred thirty-two years later, we have a King of Finance. Emperor Paulson. One of the individuals who created the problem has been crowned to deepen it.
Fear once again triumphed over hope and reason.
Bumper stickers of the week:
Those who repeat history are doomed to repeat history.
If you think 401(k) is your mother-in-law’s bra size, then you might be a redneck.
—–Jeff Foxworthy
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