Bush’s Bear Stearns Bailout is Big Stupid
This will be a quick post, based entirely on logic everyone can understand, and just uses Bear Stearns in the title as the current obvious example. The billion-dollar bank bailout goes well beyond Bear Stearns, and this is a rant I needed to make.
Let’s think about what’s going on for a second. We had lending institutions making loans that they knew many were not going to be able to afford the payments of. Then, to not a single observer’s surprise, people are forced into foreclosure because they cannot pay their mortgages.
And the government’s solution is to bailout the banks!
This is reverse of the action that should be taken, is not productive. This “solution” is also not surprising coming from the Republican White House. This isn’t a political rant, it’s the truth. The Republican philosophy is to stay out of people’s lives and support business. Frankly, that’s what got us into this mess, and there’s a much better way to go about solving the current subprime problem.
Simplifying everything: People can’t afford to pay their mortgages, so they don’t. Now the lenders are not being paid, their revenues drop, and they teeter on bankruptcy. The government’s solution is to give billions to bail out the banks, leaving the people in as much financial trouble as they were before.
Throwing money at the top will not solve the problem! But doing the reverse will!
Think about it for a moment. What would have happened if those many billions of dollars had been given to the people who were not able to pay their mortgages? If the government had stepped in and said “here’s money, that must go to your mortgage payment, to help you get by”, then not only would this help the people of this country (who pay the vast majority of taxes received by the government, unlike 50 years ago, but that’s another story) but since that money would have gone to their mortgages, the banks would be receiving their revenue.
Of course logic is lost on this administration. Everyone should be thinking very hard about who they are going to vote for in the coming election.