Tuesday, September 30, 2008

It's not a "bailout". Except that it is. Sorta.

Quote of the Day: “If you would know the value of money, go and try to borrow some; for he that goes a borrowing goes a sorrowing.” ~Benjamin Franklin

Song of the Day: Eulogy by Tool

State of mind: very confused

Date: September 30, 2008

Will they call yesterday Grey Monday? The plunge the stock market took wasn't as severe as the one in the 80s that has been dubbed Black Monday. Nor was it anything like the freefall just before the Great Depression. (And what exactly is so great about a depression?) Maybe it should be called Blue Monday since it was the Democratic majority in the House that ... oh wait... they voted for it! Well, except for 95 of them. Yet, it's just the Democrats fault? Wow. Seriously. Just fucking wow. And the main reason the Republicans are claiming they didn’t vote for it? The speech Nancy Pelosi gave just before the vote. Holy crap. Is our country really being run by temperamental children? Listen kids, put on your big pants and suck it up.
Besides, everyone has a part in this. It isn't just a 'your side, my side, your side' thing. There are no clear lines of that team doing A and this team doing B and the A Team not being able to find the right tools in the tool shed they conveniently find themselves trapped in that is surrounded by the Army & Colonel Decker ready to take them back to prison. Wait… Huh? See. It's that confusing.
Anyhow, the "bailout" that isn't. Again, this is a case of perception that is making life difficult for everyone because of a word. And a poorly chosen one at that. All last night I listened as every local and national news team went to the 'man on the street' and get America's take of the failed bailout. BTW, the bailout didn't fail. What happened was that it didn't get voted through the House. There's a bit of a difference. A failed bailout would be if it had passed and the banks still tumbled like a Jenja tower. (Man, I used to love that game.) But if you were to listen to the regular Joes that were interviewed last night you would think that the money that the House has been haggling over for weeks was a gift. It’s not. It’s a loan. A loan we the taxpayers are being asked to give to the financial institutions that collectively had eyes bigger than their stomachs. Each person said something along the lines of, “let them clean up their own mess” or “why should we reward failure” and “why not use the money to help out the little guy”. All are sentiments I can relate to except, they can’t clean up their own mess, it isn’t rewarding failure, and this is to not only help the little guy, but keep us from getting crushed by an overfed elephant whose knees just gave out. The only visual analogy of the proposal I can give is this: Say you live in a small bungalow. It’s got a cute front yard, a small garage and an herb garden in the back. Your next-door neighbor used to have a house similar to yours but with a pool out back. Then he decided to upgrade (mostly because of the deregulation that was granted in the 90s thanks to Phil “mental recession” Gramm) and he turns his cute bungalow into a McMansion. Now the place towers over yours and the house comes right up to your property line. While he was building his McMansion he asked if you wanted to go halves on some rose bushes to grow around the fence between your yards. You do so willingly because A) you love roses and your small investment will grow for years to come and B) you don’t want to have to look at his ugly wife from out your kitchen window anymore while she's in the backyard sunbathing naked. Things are fine for a few years and you are enjoying your roses until one day you notice a crack in the foundation of his house on the side facing yours. That crack continues to grow and engineers have come out to examine the problem and report to everyone that if the house isn’t braced it will come down. Now, some of your neighbors are thinking, ‘good riddance. That house was too big anyhow. Who needs all that room?’ but you realize that 'Oh My God, if that house falls down, it’ll crush mine! And then it'll roll down the hillside and wipe out the whole street!' Then your neighbor confides in you and the rest of the neighborhood that he doesn’t have the money to shore up the house and asks for help.
That’s the bailout. It’s for the bracing to keep his house from taking out yours. And after the bracing secures his house he has to fix his house himself and then pay you back for the bracing and if he doesn’t he gets fined. Plus, by having had the bracing paid for by you he can’t decide, 'the hell with it, let the place fall, I’ve got this nifty golden tent to live in'. The tent was taken away the moment he took the loan. So, if it were me, I would stand back tsk tsking his choice of McMansion because it's quite obvious that he doesn't deserve it, but I’d be worried about my herb garden and place to sleep.

...However, if everyone decides to yank him out of his house AFTER he's shored it up nicely and your house is no longer under imminent threat of becoming kindling and he gets bitch slapped by the entire town well.... I won't tell. Or, you know, gets put in jail. Because deregulation or no, there has to have been something hinky going on and someone has to answer for that.

Some reference material: (But by no means all that there is. I’m sure there are thousands of pages with articles on .. well, everything.)
CNN Money Article 1
CNN Article 2

Show quote of the day: “You better not forget the pie!”


LL said...

Ok... who am I hating now?

I think you need to take a break from the news. It seems to be having a negative effect on you...

JennyLu said...

I agree with LL.

The bail out is a bad idea, Pres should just let us fall into a depression, seep a few years, then we will recover. The bailout means an additional tax on WE THE PEOPLE for about 30-50 years and I for one would rather suffer for two years then be screwed for 50

NYPinTA said...

30 to 50 years? Where did that number come from? Actually, if it were spread out evenly it would be 6000 dollars per tax paying person. Except it isn't going to be distributed evenly. You know who is going to pay the most? The people with the most money. So in a wierd way, the people that screwed up are going to be paying for it. And with the bailout, it keeps them on the hook for the mess they made. Not bailing them out means they get to walk away from it all and do you really think if the market crashes it will impact the quality of their lives one bit? No. But who's will it? Everyone else. So I for one would like to skip the soup line just to spite some fat cats that got greedy and would willingly pay to make them clean up their mess. And, as has been pointed out, the plan is supposed to be set up so that WE THE PEOPLE get our money back. (Whether that is possible or not, I have no idea.)

fermicat said...

I don't know what to think about all of this. I'm fairly knowledgeable about personal finance and my own budget is balanced (unlike that of the federal gubberment). But I don't even pretend to understand large scale economics.

I will check out your links when I get a chance. I keep waiting for someone to explain it all in English...

trinamick said...

I loved the A Team. But boy, I sure hate people sunbathing naked next door to me. Maybe climbing roses are the way to go.

NYPinTA said...

And if they really don't understand what boundries mean, get the roses with extra long thorns. ;)