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Errr, Americans seem to need somebody to blame for this crisis. But before we lynch Bernake and Paulson, we should all take a good look in the mirror.

pmorici 18y ago
The people who really have a potential to be screwed here are those who have a positive net savings as apposed to those who are mortgaged to the hilt.
- nostrademons 18y ago
  Depends on whether you believe this'll be inflationary or deflationary. If the government decides to inflate to pay off the bailout, then it sucks for savers and is awesome for mortgagees. But if their intervention isn't enough to halt the deflationary pressure of all these financial institutions failing, then it'll be catastrophic for debtors and good for savers. People who held cash in the depression (and didn't see it wiped out by a bank run) gained close to 4x their money in about 2 years, which is as good or better than most other bubbles in history. That's relative to consumer prices: relative to asset prices (like stocks), it was nearly a 10x return.
  - albeit 18y ago
    all the more reason to stabilize the dollar at its current value. Its the inflation of the dollar that set all of this bad investment into motion.
chaostheory 18y ago
umm have you actually seen the terms of the bailout that Paulson is trying to sell? the bailout “shall be limited to $700,000,000,000 outstanding at any one time.” - the key words are 'at any one time' meaning this is a blank check for Paulson that he can just keep on drawing It gets even better: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency" so Paulson gets a blank check and we can't see what he's doing with our money - awesome! sign me up to top it off with icing: "The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation... designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;" so totalitarian socialism replaces free market enterprise? o yeah what happens to the dollar?
- LostInTheWoods 18y ago
  Who would you rather be in charge of the bailout? The President? Congress? ... Ill put my trust in Paulson, he and Bernake seem to be the only ones who have a clue as to what is going on and how to fix it.
  - nostrademons 18y ago
    I'd rather there not be a bailout: let investors like Buffett pick up $5B here, $3B there so that no one individual holds $700B in his hands.
  - aneesh 18y ago
    Definitely, Paulson knows more about this than Congress. But Paulson has the perspective that comes with being a former Goldman Sachs CEO, so he might (knowingly or unknowingly) be biased towards helping out the banks too much.
    - rbanffy 18y ago
      Not only that, but the lack of "checks and balances" in the whole deal is shocking.
  - chaostheory 18y ago
    lostinthewoods I don't know if what you posted is a joke or not, but I'm going to assume you're serious Paulson may know more than Congress about finance but it doesn't take a genius to see that the proposed bailout is just a scam. The Swedes got into similar trouble in the 90s and they solved it the right way (a bailout with a fair return for the government): "Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government. That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well." http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html http://www.nytimes.com/2008/09/23/business/worldbusiness/23k... so you'd still rather put your trust into something without reading the fine details? Paulson isn't your uncle you know - not to mention both Democratic and (even) Republican senators are just pissed: http://www.politico.com/news/stories/0908/13789.html http://www.politico.com/news/stories/0908/13789.html
jcromartie 18y ago
I looked in the mirror and saw someone who lives in a one-bedroom apartment, has modest and efficient '97 and '01 cars (one for his wife), saves about 10% of his income, and has no credit card debt. So, yeah, I'm looking for who to blame.
- LostInTheWoods 18y ago
  We're all to blame for not paying attention to what our government and fellow citizens have been up to these past years that has gotten us into this mess.
  - bp001 18y ago
    There are most certainly those who have paid attention to this and recognized this mess was coming. The poster indicating he lived in the 1 bedroom apartment clearly recognized this as the difference between his situation and how those around him were acting was too obvious to ignore. The majority rules in this democracy we live in and we can't have all policies the way we would like. However, we at least shouldn't distort the free market to this degree and spread the cost for this failure to properly judge risk.

pmorici 18y ago

The people who really have a potential to be screwed here are those who have a positive net savings as apposed to those who are mortgaged to the hilt.

nostrademons 18y ago
Depends on whether you believe this'll be inflationary or deflationary. If the government decides to inflate to pay off the bailout, then it sucks for savers and is awesome for mortgagees. But if their intervention isn't enough to halt the deflationary pressure of all these financial institutions failing, then it'll be catastrophic for debtors and good for savers. People who held cash in the depression (and didn't see it wiped out by a bank run) gained close to 4x their money in about 2 years, which is as good or better than most other bubbles in history. That's relative to consumer prices: relative to asset prices (like stocks), it was nearly a 10x return.
- albeit 18y ago
  all the more reason to stabilize the dollar at its current value. Its the inflation of the dollar that set all of this bad investment into motion.

chaostheory 18y ago

umm have you actually seen the terms of the bailout that Paulson is trying to sell? the bailout “shall be limited to $700,000,000,000 outstanding at any one time.” - the key words are 'at any one time' meaning this is a blank check for Paulson that he can just keep on drawing It gets even better: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency" so Paulson gets a blank check and we can't see what he's doing with our money - awesome! sign me up to top it off with icing: "The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation... designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;" so totalitarian socialism replaces free market enterprise? o yeah what happens to the dollar?

LostInTheWoods 18y ago
Who would you rather be in charge of the bailout? The President? Congress? ... Ill put my trust in Paulson, he and Bernake seem to be the only ones who have a clue as to what is going on and how to fix it.
- nostrademons 18y ago
  I'd rather there not be a bailout: let investors like Buffett pick up $5B here, $3B there so that no one individual holds $700B in his hands.
- aneesh 18y ago
  Definitely, Paulson knows more about this than Congress. But Paulson has the perspective that comes with being a former Goldman Sachs CEO, so he might (knowingly or unknowingly) be biased towards helping out the banks too much.
  - rbanffy 18y ago
    Not only that, but the lack of "checks and balances" in the whole deal is shocking.
- chaostheory 18y ago
  lostinthewoods I don't know if what you posted is a joke or not, but I'm going to assume you're serious Paulson may know more than Congress about finance but it doesn't take a genius to see that the proposed bailout is just a scam. The Swedes got into similar trouble in the 90s and they solved it the right way (a bailout with a fair return for the government): "Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government. That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well." http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html http://www.nytimes.com/2008/09/23/business/worldbusiness/23k... so you'd still rather put your trust into something without reading the fine details? Paulson isn't your uncle you know - not to mention both Democratic and (even) Republican senators are just pissed: http://www.politico.com/news/stories/0908/13789.html http://www.politico.com/news/stories/0908/13789.html

jcromartie 18y ago

I looked in the mirror and saw someone who lives in a one-bedroom apartment, has modest and efficient '97 and '01 cars (one for his wife), saves about 10% of his income, and has no credit card debt. So, yeah, I'm looking for who to blame.

LostInTheWoods 18y ago
We're all to blame for not paying attention to what our government and fellow citizens have been up to these past years that has gotten us into this mess.
- bp001 18y ago
  There are most certainly those who have paid attention to this and recognized this mess was coming. The poster indicating he lived in the 1 bedroom apartment clearly recognized this as the difference between his situation and how those around him were acting was too obvious to ignore. The majority rules in this democracy we live in and we can't have all policies the way we would like. However, we at least shouldn't distort the free market to this degree and spread the cost for this failure to properly judge risk.