The government’s proposed plan to bail out the financial services industry, as of now, amounts to about $2000 for every person in the country (see the New York Times article). How about we just skip giving these morons more money and directly give it to the people instead? I know that we would put the $8000 we would get back into the economy, and probably quickly.
The thing that bugs me the most is that there do not yet appear to be any penalties that will be applied to the people who got us into this mess in the first place. I haven’t read every article and analysis, but I’ve read enough to know that the people in charge of these banks, etc. didn’t even know what their total exposures were. They also probably couldn’t explain what some of the derivative instruments were that they were selling. All they knew is that they were making money. Which is the killer for me: they didn’t care what it was they were selling as long as it made them money. Too many of them didn’t fully appreciate the risks involved because they were making so much money. I think you can sense my theme here. They were channeling Gordon Gecko again.
I’m waiting for the automobile and airline industries to come to Congress and ask for their handout. If I was unable to pay my debts, nobody would care and I’d have to file for bankruptcy. But some companies have been deemed “too big to fail.” Tough crap on them. So the broader economy takes one on the chin. I’d rather have that now than potentially worse fallout later.
Tags: finance