Friday, September 26, 2008

Torn

William Buffet believes that this current Wall Street Meltdown is bad and is expecting a government bail-out. Robert Reich hates the proposal, but seems to be begrudgingly accepting it. He hopes that there will be REAL restrictions and safeguards placed on the deal. I'm not holding my breath. I keep reading, dumbstruck, as Nancy Pelosi & Prez Bush are fighting for the bail-out while conservative house Republicans work to block the deal. Did hell freeze over and I missed it?

I've studied enough macro-economics to know that I don't know shit. Most people understand less. I do see all this as a domino effect that started years ago. My economic position is almost entirely informed by the Jack Bogle conservative philosophy of diversification. Risk comes in many forms. You can be too aggressive and too timid. A happy middle which matches your needs is almost always the way to go. Unfortunately, our economy has been way too agressive for way too long.

So, now what? Now, agressive action is needed. At one extreme, We the People can bail-out Wall Street. On the other hand, we can let them sink. Either way, we're going to feel this for years, perhaps decades to come.

All of this is coming in the face of an impending Presidential Election. I'm tempted to be excited that this situation hurts McCain. We got into this mess with deregulation & agressive protections for corporations. These are core elements to McCain's fiscal policy. That temptation quickly gives way to the sick feeling in my stomach that people are hurting, that my family and friends could be hurting, that this could hurt me!

It makes me even more sick to my stomach that I've got to support the bail-out. We need to get done and done quickly. Not because it was or is the best long-term solution, but because the market expects and demands it. The mood of the market will suffer long-term effects from this falling through at this point. It would also be yet another bad sign for the American people. We are already suspicious of the ability for our politicians to get things done. If they can't come to a compromise and complete this thing, where are we then?

.

2 comments:

Nothing Knew said...

Got other things to do this evening and this weekend...I'm likely offline except for a few quick email checks.

But before I go I have to say...you are wrong. I have many many reasons for this but you are wrong.

We do not need to get something done NOW. Sure there needs to be a government response but it doesn't have to happen RIGHT NOW. This situation has been building for months...WaMu crashing isn't making it worse.

Go read some Daily Kos from the last week. There are plenty of good post there about what should really be happening.l

LRNs said...

That's fine. I skim Daily Kos and read some other econ/political blogs. My comments are not spurred on by WaMu.

I don't like the concept of the bailout. Like the smaller but equally distasteful automotive industry assistance requests, it's like rewarding the misbehaving child for not cleaning his room while punishing the good child for doing her homework.

I don't like the current economic climate even more. The fact that it's happening to start the 4th quarter & the holiday shopping season. I hate it because I want my parents to retire soon. (And a host of other people I worry about in this economic climate including you.) Sometimes the time for action is RIGHT NOW. Sometimes tomorrow or next year is too late. This happens to feel like one of those times.

We need better oversight of banking and mortgage securities. We've needed this for years. We've forgotten the lessons of the 80's.

It should have never gotten to this point, but here we are. I watched an interview with Thomas Friedman the other day where he said that the US is/will fall behind Europe & Asia in our standard of living.

So, it's fine that you disagree and maybe I am wrong.