Monday, September 29, 2008
No Bailout Yet
So the bailout bill failed to pass in the House. The Republicans played the "bipartisanship" game most beautifully.
The bill that failed today was better than the initial bill but it didn't include any of the stuff I wrote about in an earlier post and it wasn't anywhere as good as the 1992 Swedish bank bailout plan was. It wouldn't have done very much but it might have kept the markets going until the next administration which then might have had more scope to do something more serious to fix the market problems.
Most people in the U.S. are opposed to the bailout of the financial markets, full stop. There are, however, fairly good reasons to be concerned about the markets even if you have no mortgage problems or a shrinking retirement investment. Money is like oil in the gears of the economic engine and the lack of money there will cause horrible grinding noises, failing parts of the engine and breakdowns. Unemployment will rise, lots of people will see their retirement income shrink, lots of people will find that dad or mom will not live in Florida after retirement but with them. Lots of people will find that little Jenny's college fund isn't enough to buy her more than a week or two. And so on.
It's important to keep in mind these problems, too, because the unregulated markets will not.