Update: The arm twisting and enticements ($150 billion in tax reductions) continue on Capitol Hill as lawmakers wrestle with the mess that is the Street of Broken Dreams. Many economists agree on two things: the bailout of financial firms suffering from a lack of liquidity is not the fundamental reform the banking system desperately needs, and the $700 billion expenditure of tax money will probably not prevent the country from entering recession. Six million homeowners are expected to default their mortgages this year and next, yet the bailout does nothing to allow modification of loans they cannot afford. Since 2001, eight of the most troubled firms have donated $64.2 million to congressional candidates, presidential candidates and the Republican and Democratic parties, according to data from the nonpartisan Center for Responsive Politics. The donors include investment bankers Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley, insurer American International Group and mortgage giants Fannie Mae and Freddie Mac. Washington pols have plenty Mo' Money, but logic, vision and integrity are commodities in short supply.
{10/1/08}Imagine you are in a fishing boat, rolling with the rough ocean swells. There is a storm out there disturbing the ocean surface. Your boat is old and in need of repair. There are a few leaks and water is occasionally coming over the side. Suddenly a large supertanker heaves over the horizon coming toward you. As it gets closer, looming over your boat, you read the name of the vessel on its hull, "MS Casino Capital". You hear an amplified voice coming from somewhere up in the towering superstructure over the roar of the wind and waves: "Can you take aboard our crew? We have loss power and are shipping water!" As captain of the fishing boat are you going to heave over a line in a rescue attempt? Will you risk the safety of your crew? Or will you leave them to use their own life rafts if their huge ship sinks? Stand by to find out the answers. If you happen to be browsing for an alternative to the Paulson bailout plan, try Congressman Peter DeFazio's (D-OR) website were he proposes some common sense precautions to prevent a total financial collapse while more fundamental legislation is prepared to revive the economy. http://www.defazio.house.gov/index.php?option=content&task=view&id=441