By a margin of 55 percent to 31 percent, Americans say it’s not the government’s responsibility to bail out private companies with taxpayer dollars, even if their collapse could damage the economy, according to the latest Bloomberg/Los Angeles Times poll.
I’ve gone from a (very) reluctant supporter of a (very) limited bailout to being opposed to any such rescue, along the lines of what [url=http://pajamasmedia.com/blog/an-alternative-to-the-wall-street-bailout/]Arnold Kling[/url] is advocating. No one knows what these mortgages and mortgage-backed securites are worth right now, and it’s likely Treasury will overpay the firms holding them right now in sweetheart deals. That’s the last thing we need, frankly – these guys need to lose sleep, feel pain and see the floor drop out from under them. It will provide a far more useful education for them and others who want to be like them.
The alternative: higher taxes, more government meddling in private companies, more idiotic regulation….is a cure worse than the disease. No bailout. Period.
I wonder how the ripple effect of the non-bailout scenarios will affect folks’ stock portfolios, 401 k’s, etc and how that would affect those close to retirement.
This bailout is merely protection for the Bush family fortune, and protects a major stock holder in Morgan Stanley….who happens to be Secretary of the Treasury.
Any time we get the government involved we have a disaster…let the big boys loose their fortunes…cancel their plans for early retirement…and get back to work at outrageous salaries to rebuild their capital…this is the private enterprise system that has made America great.
The real problem in Bush’s plan that no one is mentioning will be the inflation that follows the devaluation of the dollar when politicians are afraid to raise taxes to pay for his bailout…so let the system correct itself.
I for one am going to take that $100 I have sitting in the bank and invest in a tank of gasoline for my old gas guzzler…
If Treasury was really going to buy the mortgages at fair market value, it would cost us nothing because the fair market value would reflect the borrowers’ abilities to pay, the value of the properties and the anticipated costs to service the loans. It won’t and we all know that. But why exactly, should I susidize Joe Blow’s mortgage payments? I didn’t borrow the money. Why should I guaranty the buyer of the mortgages that it won’t suffer a loss? I didn’t lend money to Joe Blow. I didn’t fail to investigate his ability to pay. But the bailout presupposes that I will have to bail out both Joe Blow and the Wall street morons who bought his loan. Why?
See also [url=http://www.spectator.org/dsp_article.asp?art_id=13933]this proposal[/url] being circulated by Rep. Thaddeus McCotter. This actually sounds rather sensible, and doesn’t reward those who have behaved irresponsibly nor commit endless federal dollars. It encourages investors to put their own money into suspect assets, with the possibility of a no-capital-gains tax treatment if it works out right, and no loss to the general public if it doesn’t.
If (and that is a big “IF”) there is to be a bail out, the taxpayers putting up the money need the upside from a turnaround. In other words, if XYZ bank has the Treasury buy its crap, the loss on the toxic assets should be convertible to preferred stock in the financial institution that the US can hold, sell, etc.
Let ’em eat cake!