Monday, October 06, 2008

A Terrible, Terrible Decision by Our Government

Something has been bothering me the last few days, and I have decided to use this forum to get it off my chest. Our government passed a $700 Billion economic bail out package last week. We were told last week that the government had to do something. Some members of the House who voted against the plan on Monday, justified their vote on Friday by saying, "Things are bad, and we can't sit by and do nothing, so I am voting for this plan I don't like." Let's put aside the millions of dollars of earmarks (bribes?) that were associated with this bill. This logic is terrible because there are more than the two options of (a) do nothing, and (b) pass a bill that is so large, I can't even consider the amount of money it encompasses.

The "funny" thing about this is we were told we had to pass this bill. The Senate passed it, the House passed it, and the President signed it. Both Presidential candidates voted for it. The market, however, seems to have other ideas. The market tanked on Friday, and tanked again today. The market closed just below 10,000 points for the first time in a long time.

We are now being told that these things take time. The market will respond over the course of the next few weeks. We are also being told that the government has to take its time when using this $700 Billion so they don't abuse it and don't misuse it. What happened to "we have to do something now?" What happened to "we were going to see a crisis if Congress didn't act"?

The truth of the matter is there was always the (c) option. This option entailed looking at other options that might fix this situation without costing $700 Billion. This option entailed taking time to examine the situation, examine the failures of Freddie Mac and Fannie Mae, and then proceed with that knowledge and with the caution this situation required.

However, this is an election year. Obama and McCain have now both showed that nothing trumps looking like you're doing something in an election year. Most Representatives and Senators have done the same thing. Political commentators that I admire spent last week arguing that something needed to be done so that this won't be saddled on their presidential candidate.

For the first time I can think of, I am truly mad at my government. I honestly believe our government got it wrong last week. Getting it wrong if you think you are doing the right thing is one thing. Getting it wrong with the intent to simply win an election is an entirely different can of worms.

Over the next few weeks, I will be adjusting a few things. We have reached a point where more seems to be required of me and like minded individuals. I don't know what my new course of action will be, but I am going to chart a new one. This blog will continue to be a forum for open, honest, political debate. However, I will be getting more active somehow, and I will be bringing my readers along on the journey.


Saint said...

I find it interesting that foreign economies were not tanking until after we passed the "rescue bill". Or, if they were, no one in our media was covering it.

Senior Lady said...

I'm not trying to make excuses for anybody, because I (like probably 95% of the population) don't have a clue about what course of action is best in this situation, but what would we have thought about the market plunge Friday and Monday had Washington done nothing?

My understanding is we have never been in a crisis this serious before(or are we just being scared beyond belief--again?). This complicates the decisions more than just it being an election year, don't you think?

Patrick said...


I have to disagree with you this time. If you notice, there is quite the trend with the "top" economists. Bush will have his top economists say we need the bailout and other will say we don't. If I've learned anything about the way the market works, it is a fact that credit and market fears go hand in hand. If there's no credit, then no one wants to loan. But that's only part of the way the market works. Even though we will have to worry less about what will happen to large companies who fail because of the economy, it's the consumer that still controls market fears as well.

People are still losing jobs and homes, so that tells us that there's less buying power. No matter if you shore up these large companies, the damage done already will not change overnight. I will tell you this though, think of how many organizations and companies who have to borrow money for payrolls until getting paid for their services, would have to close their doors if suddenly they could borrow no more money.

Patrick said...

Saint -

Actually, foreign markets were already taking a tumble. It just got worse when the DOW dropped severely. Since China owns somewhere close to 30% of American investments (I have to re-check that), of course their economy would suffer also.

Europe and Asia took advantage of the weak dollar. While it is not such a good short term decision, America will regain its economic strength and these countries will benefit in the long run.

Andy D said...

I heard some talk Saint, but nothing like today.

Senior, how do you know the market would have plunged like it did if we hadn't passed the bill?

Good comments Patrick.

I am still thinking on this issue. I believe we made a terrible mistake in this, and I haven't seen anything that actually addresses problems, just more band aids.

Senior Lady said...

Andy: I don't know one way or the other; just asking the question. I'm not convinced it was the right thing to do, but if it works I'll be thankful.

pack04 said...

I am with Andy. I am very disappointed in my government. No leadership. Finger pointing. Proof that they do not care about the people, just themselves. Their answer to everything seems to be to just throw money at it.

Andy you talk about doing something...well first off I am calling my Representative and my two Senators. Come November my vote will be my voice.

Is there anyway that a mistrust in our government, low approval ratings, could have anything to do with a mistrust in our economy? People are not sure what is going to come of this election and have been worried about it for sometime... about the same amount of time that all this financial mess has been going on.

Everyday I think about this the more I believe it to be true. It does not matter who wins this election because America will lose.

Andy D said...

Senior, I wasn't trying to attack you personally. If you took it as such, I apologize. Your comment represented what I think was a failing of leadership. Republicans, Democrats, and the President, all argued that this $700 Billion bail-out was better than nothing. I don't think they actually considered what effect doing nothing might have had. I also don't think they ever considered other ideas. I think our leaders looked at the little ticking clock counting down the number of days between now and Nov. 4th, and decided to get behind the first idea that came up. That is a problem.

We need to remember that sometimes doing something can have more of an adverse impact than doing nothing.

Pack, I am starting to believe you are right. As far as the economic crisis, there is very little difference between McCain, Obama, and Bush. There are other economic policies that are very different, but really they are all talking about the same thing when it comes to the eco crisis.

But I am still wondering, what else to do...

Senior Lady said...

I didn't think you were attacking me; did I sound defensive? Don't worry, as long as you don't call me stupid or anything, I'm not a "sensitive" person!