Let it crash

When the Great Depression pushed the unemployment rate to 25%, no one in the Rockefeller, Vanderbilt, Carnegie, or Morgan families (to name a few) lost their jobs, or their fortunes.

Today's captains of finance and industry are better positioned to preserve their wealth that their forerunners of yore.

Anything approaching a crash today will not hurt the mega-rich. It will hurt John and Jane Public though.

And when John and Jane Public are hurting bad, what are politicians likely to do?

Created government funded relief programs of course, and where will they get the money to do so? They will borrow it of course.

The only way an economic crash will clear national debt off the backs of our kids and grandkids, is if it wipes out the entire economy. Now there's medicine guaranteed to kill the patient.

I certainly can understand the outrage people feel about a bailout, but if resistance to it is based on not wanting the Fat Cats at fault to get to keep their wealth, it is misguided.

The Fat Cats at fault have already made and preserved their money. Letting the companies they ran crash and burn may hurt their egos, but little else.

They will be involved in decade long litigation by shareholders, but they all have D&O insurance, and, again, their wealth is safe (If you doubt this check out the Michael Milken story - BTW, Esquire, a magazine that considers Bush a greater tyrant than Putin, named Milken as one of the 75 most influential persons in the 21st Century.)

If resistance is based on the staggering nature of the number (700 billion), it is misguided.

Even if the initial cost of the bailout is 700B, it's not like that money is being flushed down the national toilet. It's purchasing assets. To be sure, those assets are not worth much now, but this will change, and there is a reasonable possibility that the government will actually make a profit.

It did when it bailed out Mexico (thanks to Clinton), and it can be argued that it did so as well when it bailed out the S&L industry.

Exactly how the bailout is accomplished is subject to reasonable debate, but there must and will be a bailout.

Roughly 50% of the populace are opposed to the bailout. About 90% of them have no idea how much of their personal fortunes are dependent upon the financial markets.

Advocating a market crash to flush out the economy is similar to advocating a firehose enema to flush out your colon. Probably will be clean, but chances are pretty good it will be in tatters

In other words everything remains the same; the rich keeps their riches, and the middle class and poor suffer.

No c.i.

He said that if your colon's clean it's in tatters.

I don't agree. I like the idea of a clean colon. It means I can **** on the tablecloth without shame. "Tatters" was an assertion. A clean colon is a fact.

If we let the economy crash...yes.

Why don't they get a job delivering newspapers in the morning?

CI, who're kidding? If you were wealthy? How many millions do you have in retirement annuities?

You're easily worth several million$$...

I agree, Finn.

I don't like that we are where we are and I don't like that all of us are at the mercy of the markets the way we are (see Try's posts earlier) but those are the facts and unless we're willing to kill the patient then I don't see any way clear of this bailout.

My problem is that I have no confidence that the folks with the pens who will be signing the checks have anyone's interests in mind beyond those "fat cats" who keep the wheels turning.

I know why we're in this situation -- or at least I think I do, but I don't like having to put faith in folks who I have no faith in to get us out of it.

A; there's some bad guys in Chicago, nothing but greedy mafia types.
B; yeah, I hate them greedy bastards.
C. over 3% of those who live in Chicago are greedy mafia types and my philosophy mandates that they can't continue with their greed.
A; only one solution, we must nuke Chicago.

Pssst, Miller. People don't read papers anymore. Subscriptions are WAY down.

Actually I am leaning toward the Senate plan that would buy up the bad debt and hopefully turn most of it into good debt and recoup most or all of the mpney. I am less comfortable with the House 'insure the bad loans' plan as I can't see how that would solve the problem of the credit freeze we currently have. Unless we free up credit so people can meet their payrolls, etc., the economy crashes.

I still believe that the 'fat cats' would take their hits by selling the government those debt bundles at far less than what they paid for them. And if our fearless leaders have the guts to 'offend' their fat cat buddies, they will include in the deal new rules that executives of institutions unloading their bad debt will also forego those golden parachutes, mega bonuses etc. at least for a period of time.

The President, Senate leaders, and House leaders also all need to do a much better job of explaining whatever plan to we the people much better than they have so far. And we all need to be advising our elected leaders that we will not be happy if they try to include a whole bunch of unrelated stuff with the solution.

The Senate backed plan (Paulsons / Bushs with clarifications) is the one I do understand. If I understand it, I imagine anyone that wants to can do so.

The Republican version is way more complicated and difficult for the average American. It also looks, to those of us that do not understand all the ins and outs of Wall Street, like it is basically MORE of a bailout and giving the fat cats more chances to fail. (In which case, we are back to Paulson/ Senate plan anyway)

I do find it interesting though that the three page outline was given to the Senate 10 days ago with the demand that they needed to pass it NOW!!! or else!!! ... We haven't crashed.

You understand it pretty much. I understand it pretty much. But the e-mails, telephone calls, faxes, text messages, and telegrams flooding into Washington offices suggest that a huge majority of Americans aren't understanding it and are adamently angry about it and demanding their elected leaders not buy into it. Those getting their information only off the nightly news--most in the media don't appear to be understanding it--aren't having it explained in language they can understand. And that is our problem.

Where do the rich have their fortunes? How are they safe?

(Real question. I can't imagine where money would be safe at this time since we are talking about having to complete a plan by Monday before the China market opens)

swiss francs or precious metals is my guess.

The Caymans...

Actually you and JPB are right. Make it attractive to do so, and the wealthy keep their money invested in the USA--they give big chunks of it to build new libraries or hospital wings or s new building for the YMCA. They spend it which boosts the economy. They invest it which creates jobs. They save it in US financial institutions which provides money that the rest of us can borrow to buy homes, cars, pay for college, or invest in our own small businesses. They risk it to develop new products, technologies, and possibilities that move our civilization forward.

They don't mind paying the lion's share of the taxes, which they do now, so long as they can be profitable doing business in the USA. Try to take more from them making it unprofitable to do business here, and they clamp down on that money and park it someplace safe from the tax man so that it is no longer available to benefit anybody, or just move it to some other place that provides a more hospitable business climate.

Those however who have been negligent and/or irresponsible with our money that we entrusted to them as investments do need to be held accountable. It is just possible that Congress now agrees with that and that will be part of whatever solution they finally come up with for the current financial crisis.

I also think the Caymans is where many keep their money to prevent taxation of their wealth.

O.K. ~verily ~verily i say,,, Amen.

So, we're finally in agreement.

Is that where you store your dough?