Tuesday, September 23, 2008


OK, I promise this is NOT NOT NOT political, so feel safe to read all of my conservative and liberal friends alike!!!

I wanted to blog, though, about the bailout for a couple of reasons: 1)This is an historical time with historical significance, and I want my thoughts/feelings recorded for posterity 2) I have really tried to figure out what is going on, and still have no answers, so I truly want to hear what everybody thinks about this (even you Brits!) and your opinions. Honestly, there are no right or wrong answers- it is just a mess! But, I did hear of a poll that said that as of today 44% of Amerians thought the bailout was a bad idea- which is a lot. With that said, however, I bet 90% of Americans don't understand what is really happening (I am definitely included in that 90%!!!)

So, here is what I want to know from you:

1. Should there be a bailout?

2. Do you understand much about the bailout? Can you give us some insight?

3. What are some pros/cons of the bailout?

4. Are there any other solutions?

5. How will the bailout affect you personally?

6. Are you scared about the economic state of the US right now, or is it being blown out of proportion?

7. Any other thoughts you might have about the bailout.

Obviously, you don't need to answer all of the questions! Notice none of the questions involve giving the blame to anyone- there will be enough time for that later.

Like I said, I have tried to read and watch the news and understand what is going on. My thoughts so far (and this is definitely an evolving process, hence my wanting to hear other viewpoints): It seems that a bailout is necessary in some form. 700 billion seems like an awful lot. If there is a bailout, I definitley think there has to be some form of oversight, and CEO's who take part in the bailout should relinquish all rights to bonuses (if they are leading a failing business, why should they get a bonus?) . I certainly do NOT think we should give Bush complete power like he was asking for last week, and I do think whatever happens should be well thought out, not rushed into, so I am ok with the bailout taking time to work through the details, even the stock market continues to fall.

I think it is very scary, though, to put the taxpayers in such a horrible position. If the bailout doesn't work, we are all in trouble. I do think this is a scary situation- at ward conference on Sunday (church) all they talked about was the economy, which was interesting.

I am also worried because while this happened in large part because of bad loans, that doesn't take into account all of the credit card debt this country has. I don't know all of the numbers, but I know the average family has like $14,000 of credit debt that they can't pay. What about when all of those loans come do? Will there be another bailout to Visa and Mastercard? Maybe we should let the market works itself out. I thought analysts said that in a market economy there would be a recession every 15 years or something.

Anyway, I won't say too much now, but rather wait for some comments and begin a dialogue that way. Like I said, this is all just the beginning.


  1. Well, I have thought some more about this- I like your comments, Curt. I think you are right- as long as we keep working hard and spending less then we earn, I think individual families will be ok-provided, of course, they don't lose their job.

    I do think there is plenty of blame to go around- certainly the Bush administration is not known for being honest in their dealings (i.e, Haliburton), and in reality probably very few politicians truly are. I remember hearing a senator in Canada talk about America and say that we were no longer a republic or a democracy- we were a capatalist society led by corporations (i.e., the corporations make the laws). Unfortunatley, in order to get elected, it seems politicians have to take money from these greedy companies to pay for their campaigns, and then those politicians are beholden to those companies- almost like bribe money or something.
    With the bailout, though, I am starting to be more and more skeptical. I was thinking last night about the stimulous checks we were sent a couple of months ago- that cost us billions of dollars and was supposed to head off a recession. Now, the government wants to take hundreds of billions of dollars to head off the same recession. And, we still haven't factored in the America's credit card debt (I know I keep bringing that up, but I foresee that as another financial disaster in the making). It seems to me that a recession is inevitable, but when we are actually in one there will be no money left to help the people who lose their jobs and will truly need government help. Part of me wonders if Bush is trying to get this package so quickly so that he will look like the "good" guy and then whoever takes office next will be left with the recession when if finally hits and then that person can be blamed for it.

    And then, of course, it seems like if investors have been cooking their books for gain, they should be punished, not rewarded with taxpayer money! It is all so frustrating! I guess there are no right answers...

    I am hopeful oil prices will keep going down, but lifting the drilling ban is only a temporary solution. We do need to invest in alternative energy, and hopefully whoever is elected will focus on that as well.

    I really wouldn't want to be the next president- he is being left with quite the mess!!!!

  2. ha..this is funny...we agree on everything! I LOVE studying financial markets. The good news is that Bush isn't the only one pushing for a quick decision on the bailout plan. Everyone is pushing for a quick resolution. Whatever happens needs to happen very quickly.

    You'll also be pleased to know that it's not the investor's cooking the books. It's the actual companies. Fannie and Freddie were overstating earnings causing the real estate market to continue growing so well and qualifying executives for bonuses. This is why they need to be regulated. John McCain really isn't the same as Bush on financial and economical issues or even immigration issues. The only thing they are really EXACTLY the same on is the war in Iraq. McCain supported oversights to Fannie Mae and Freddie Mac. You should read his statement made to the President regarding those two organizations.

    Other good news is that credit card companies won't go under. They ALWAYS get their money. The majority of cardholders pay for some time on their accounts, then are unable to. By the time the account goes bad, the credit company has made TONS of profit already. In fact they are making a higher return than oil companies right now. They are protected because they can sell their bad accounts for a profit to either a collection agency or even a collection attorney who can then obtain a legal judgment to seize certain assets like bank accounts, tax returns, even economic stimulus checks. It would be good to know how many of those stimulus checks actually went to pay bad credit card debts! If any company is making "too much" money unfairly, it's credit card companies. They've always made the most money by offering credit to people with bad credit, and they've always succeeded. Contrast that with housing...the subprime housing market didn't really exist until the Clinton administration lightened up regulations on Fannie Mae and Freddie Mac. Not saying it's their fault...just saying that there wasn't really a subprime market until then. The blame is to be placed DIRECTLY on the companies cooking the books and causing artificial market changes in the economy. It's not to be blamed on any aspect of govt.

  3. Fair enough- I can agree with that (I know, it is surprising!). So, I guess now the question is: where to go from here? I am pleased because I just saw that Bush plans to address the nation tonight- I really think he needs to do that, and not like last week when he spoke for 2 minutes and then RAN back into the oval office- that just made him look incompetent and like a goofball. After 9/11 he gave some very good speeches that seemed to bring the people together and explain the situation, and I really think he needs to step up as President and do that again- hopefully he will be able to do that with whatever address he is planning on giving the public.

    I would be curious to know if any politicians are getting any kickbacks for passing this. I haven't heard anything, but I wouldn't be surprised if there was some dirty-handed stuff going on under the table.

    I have also heard a lot said that passing this is better than the alternative- but no explanation has been given as to what the alternative would be. The words "calamaity" and "world-wide crisis" keep being used, but what would that be? I assume they mean recession, but certainly we have seen recessions before. If instead of bailing the companies out we saved the money and invested in our infrastructure- i.e., use that money to build bridges and do things that actually GIVE people jobs so they can pay their mortgages and credit card bills when the recession finally does hit, that might be a better solution as it allows the bad people in the market to be sifted out and save taxpayers tons of money. Just a thought.

    I will always agree with you that credit card companies are the whore of the earth:)

  4. Ben and I just watched Bush's speech and I have one word: Wow. For once, he sounded like a President who knew what he was talking about and he presented the information in a real way for the common American to understand. It will be interesting to see what the analysts say, but I thought he said exactly what needed to be said (and you know coming from me that I mean it!).

  5. I'm still trying to understand all of this and have not had a lot of time to research so I'm glad you poted this and for the comments that have been made. I had to work last night so I did not hear Bush's speech, but heard it was a good explaination of why we are where we are at and what we need to do now.
    The bailout does seem like A LOT of money, and I think it would be wise to give some now and some later so that companies were forced to use the money wiser, but who knows if that would work either. At least there is some plan, even if it seems like it will cost us a lot in the end.
    I do know that last week they posted a list of 500 stocks that you can no longer short and that Warren Buffet is going to give about 9 billion dollars to help Goldman Sachs. Too bad we just didn't have more of him!