Plug Your Nose and Vote for the Bailout!
By Todd Weiler
Senator Bennett explains the recent financial crisis like a wreck on I-15. All of the cars that end up stuck in traffic represent our paychecks, loans, pension plans, 401(k)s, etc. The only way to get the traffic moving again is to remove the vehicles blocking the lanes. The “bailout plan” was designed to remove that blockage.
After Congress encouraged (or even pressured) Freddie Mac and Fannie Mae to begin making riskier home loans, those loans were bundled and resold to investors. This allowed more money to flow into the housing market, inflated real estate values, and subsequently resulted in even more bad loans. When the economy slowed down and gas prices shot up, some of the “risky” home buyers couldn’t afford to continue making their mortgage payments. In a simplified way, this is what caused the wreck. By repurchasing some of the bad mortgages, the government is removing the blockage caused the financial traffic to back up.
When some drivers learned of the government’s plan, they experienced road rage. They felt that the government should leave things as they were, and let the traffic work itself out. They were quick to point out that greed caused the wreck in the first place, and found fault with others on the freeway.
Senator Bennett said it best. “We keep hearing that the markets will adjust and everything will be alright and the stock market will be okay. But let’s move away from the stock market to where the real problem lies, which is in the credit markets. We don’t have a single barometer for the credit markets the way we do with Dow Jones following the stock market, but we have indications all along the way that the credit markets throughout the world have seized up.”
“Let’s not spend our time as the fire is burning running around trying to find out who the arsonist may have been, while the fire destroys the building. Let’s free up the credit markets right now.”
When I was asked last Friday how I wanted my congressman to vote on the bailout, I responded that I wanted him to plug his nose, throw a fit, and vote in favor of it. The only thing worse than doing the bailout, is not doing the bailout.
When the stock market crashed on October 29, 1929, President Herbert Hoover decided to let the market work itself out. That may have seemed like a reasonable choice at the time, but it resulted in the Great Depression. I don’t like this financial crisis, and I don’t like the bailout either. But I also do not want to repeat the mistakes of the past. So I applaud Congress for passing the bailout package, and hope it wasn’t too little and too late.
October 9th, 2008 at 12:16 pm
applauding congress for passing that is like applauding the march of socialism, you need to actually read the bill before you make a claim like that. Giving government control direct control over credit is I believe #5 on communisms list of things to do (Karl Marx’s points of communism). Something needed to be done but this had far too much pork, and far too little accountability, but hey we should be use to that by now. Seems government has forgotten that word.
October 23rd, 2008 at 1:21 pm
Okay, here is a second attempt at posting this.
I disagree completely. This is one step closer to socialism. And it was the wrong thing to do.
I will not be voting for either Hatch or Bennett. They have lost my trust in their ability to ever do the right thing despite hard times.
October 23rd, 2008 at 5:11 pm
[...] talked to them first before I called them out publicly. Thanks for your response, and posting of my dissenting opinion at the [...]