Now that Congress has rejected the massive bailout proposal for the nation’s financial system, perhaps some cooler heads can actually take a look at what needs to be fixed, and come up with ways to fix it without rewarding greed and risky investments.
Now that Congress has rejected the massive bailout proposal for the nation’s financial system, perhaps some cooler heads can actually take a look at what needs to be fixed and come up with ways to fix it without rewarding greed and risky investments.
Enough Democrats and Republicans in the House of Representatives looked at the hastily cobbled together package and deemed it unfit. That sent the markets into a tizzy, but at some point the “government of the people, by the people, for the people” has to stand up and actually do something for the people. That means stop punishing taxpayers for the sins of Wall Street.
No one was happy with the compromise legislation hammered out last weekend by congressional leaders, including those congressional leaders. They held their noses and approved the legislation, even though they knew that the majority of their constituents didn’t want a massive bailout. They knew that having the federal government become the banker of last resort and purchase all of those bad loans, mostly sub prime housing loans, was fiscally irresponsible and set a horrible precedent.
Yet they forged ahead with the bailout plan because they worried that their constituents would accuse them of fiddling while Rome burned, especially while lame-duck President George Bush was doing his best Chicken Little imitation. The “Depression” word was bandied about Washington, and every politician in the nation’s capital felt that chill on his or her spines.
Yes, something must be done to make sure the lending market does not fall apart, as banks and other financial institutions, saddled with bad debts, were simply opting out of the lending market. That was affecting not only home loans but also college loans and business loans. It meant that there was no money available for investment: in people, in businesses, in infrastructure.
We urge congressional leaders and the White House to be prompt and prudent in coming up with a better solution. There should be ample oversight and perhaps some mechanism to make sure those CEOs of the affected financial institutions are not rewarded for their malfeasance but instead are held accountable for their business decisions. There should also be provisions that make sure that there is better regulation of the financial markets and not necessarily more regulation. Obviously, the oversight agencies that were supposed to guard against this kind of financial meltdown were asleep at the wheel. That is not surprising, given this administration’s history with FEMA and other agencies.
But forcing taxpayers to swallow those loans and giving the money to the same cartel of financial “wizards” who made all of those bad loans in the first place reminds us of the definition of insanity–continuing to do the same thing and expecting different results.
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