No Bailing Out the Wealthy

Started by rcallicotte, September 22, 2008, 02:28:28 PM

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rcallicotte

There's a reason there's a proverb that says that to give money to the wealthy is unwise.

http://www.votenobailout.org/

Of course, I'll hear you out, if you have a logically diversified point of view.   ;D
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moodflow

If this is what I think it is, what an absolute travesty.  People need to pay for their financial mistakes (or any mistake for that matter).  Otherwise you don't learn AND its unfair.
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old_blaggard

I sent a message to my representatives.

While I agree that this degree of bailouts is bad, I am of the opinion that some action was necessary to stem the current crisis.  Hopefully this debacle will lead to new legislation that will help regulate this industry, just like what happened during the great bank failures of the '20s and '30s.
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Inscrutable

Sorry to play devil's advocate, but you have to be realistic, with or without a bailout the big, high-earning bankers aren't the ones who are going to pay!  The people who will pay if there is no buyout are those ordinary people who own their own homes (or God forbid, who just want to get onto a reasonably stable housing ladder), or simply those people who took out perfectly legitimate loans through their high-street bank, etc.

Without a bailout, the rot will spread and will soon trickle down to the ordinary folks...

Sorry to say that!  I should clarify - I'm not advocating that these bankers should get away scott-free, merely that preventing the bailout would not hurt them, merely the little people.

There's also the fact (and I realise that I'm wandering dangerously off point, so I'll stop after this) that at the end of the day, we WANT entrepreneurs and banks to take risks (it's good for enterprise and therefore good for the economy as a whole) - if people are penalised too strongly for taking these risks, you run a real risk of disinclining existing entrepreneurs or new ones from making investments, which is something that no economy needs at this present time.  It's a difficult balancing act, and I don't envy those people having to weigh up the options.

It's just that in this case, the safeguards on the financial markets weren't stringent enough and the risks have gotten out of hand. In a very bad way.  Okay, I've finished playing Devils advocate...

Inscrutable

moodflow

Well I may be arguing something differently, but living here in CA, I saw wayyyy to many people buy into houses they could not afford to begin with (via variable interest rate loans).  This being due to an artificially overpriced market that fed itself upwards in a positive feedback loop. 

These buyers signed a contract stating they would pay money to a lender.  And when it came time to pay, they ran away.  And now the government is going to bail them out at the taxpayer's expense.  This is how the market will collapse.
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rcallicotte

Moodflow, that is a pretty good assessment.  But, I do believe we saw a bait and switch among many realtors as well as many people being approved for loans they could never pay back.  That means someone made money at these buyers' expense...greed, basically.
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Cyber-Angel

Buy the buy, dose anyone here wish a repetition of The Crash of '29 and with it the complete and total derailment of the Free Market? The golden years are now well and truly behind us, the longer it takes to pass the $700Bln emergency recovery package, the longer it will take for confidence to return in the banking sector which will in turn see an in cress in negative equity flow in the market, which consequently see further erosion of consumer confidence thus further depressing the market.

The enforcement of market regulations has in recent times been slight, and further more the current situation has been easy to read for at least the last year and a half and so could have been throttled back to allow for stability to return to the market; this did not happen and consequently we face the current economic downturn we face at the moment.

Regards to you.

Cyber-Angel                 

rcallicotte

@Cyber-Angel - My question:  What consumer confidence?
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efflux

They need the bail out. It helps bring the US economy down, helps install dictatorship (already most of the way there). Otherwise it won't be so easy getting people to conscript into the army or into those Fema concentration camps.

Inscrutable

Lol, Efflux - I love your optimistic outlook!  :D

Inscrutable


buzzzzz1

Quote from: calico on September 30, 2008, 10:39:08 AM
http://www.time.com/time/business/article/0,8599,1845209,00.html?cnn=yes

Great Read! I agree totally, If all that made mistakes aren't made accountable nothing will be learned. But sadly it will be a very painful and eyeopening experience for all of us.
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otakar

As a contrarian the fact that all the nation's leaders and both presidential candidates are screaming for an immediate bailout tells me this is a very bad idea. A lot of very bad legislation was enacted when it was rushed through in recent years.

PG

I agree with Inscrutable here. The brokers are the ones who make the risky decisions and they're very good at avoiding the burden of responsibility, after all they're not losing their own money, they're losing the money of their clients, who can just fire a couple of family men and women in place of cheap foreign labour if they haven't already.
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rcallicotte

@PG - You should check the article above.  The people who are screwing with our money should be the ones held accountable; not making the average guy buying his car and house terrified of losing everything, because (and only because) someone else has been careless. 

Accountability.
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