This Bailout Must Be Stopped
As I talked about below I’m very much against this bailout, as it seems many of you are too. And as I feared it now seems that those bastards sorry I meant really smart and terrific folks in the Treasury Department and Congress decided to really open up our purse (link via HotAir)
In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other “troubled” assets held by banks.
The changes, which were included in draft language that also opened the bailout program to foreign banks with extensive loan operations in the United States, potentially added tens of billions of dollars to the cost of the program.
Although it was a major addition to what was already the nation’s largest-ever bailout, it did not become part of the debate between Democrats and the Treasury over details of the program. A Monday counterproposal by Senate Banking Committee Chairman Christopher J. Dodd included such consumer loans as well as mortgages, just as the Treasury’s draft did Saturday night.
This is simply gobstoppingly outrageous and unwarranted. I remember when I was in college in the early 80s; I was besieged everyday even back then with “pre-approved” credit card applications. I had no job; well, I drove buses at Virginia to make my beer money, that’s true, but I was at least in theory a full time student, no real income, but I could have gotten all the plastic my heart desired and lived large. And my heart did desire, it’s true. But I had this weird archaic notion that if I spent some money I would need to pay it off relatively soon; like the next month. So I never took any of those folks up on their offers. Fast forward a few years to after I take my degree and get a full time job working for an exceedingly large grain company in Manhattan. Sure, I was only making about $14,000, but as a single guy sharing a house with 2-3 other people in Bloomfield in 1986 you could survive. And so now that I was gainfully employed with absolutely no debts you think I could get a credit card? Nope, nary a one. I couldn’t even get a charge card from a freakin’ department store, let alone a “major” credit card. So I had to work and scrimp and save and live humbly until my situation and salary slowly improved and I was able nibble at that opium-laced pie that is Credit.
Did I say “live humbly”?
Treasury Secretary Henry M. Paulson Jr. stressed that the additions were needed to ensure that student loans and credit cards – which have become indispensable to the spending habits and career plans of many Americans – do not become victims of the widening credit crunch.
Maybe I’m missing something here, but it seems to me that perhaps, just perhaps these “spending habits” are in fact a major part of the problem and should not be encouraged or subsidized. And they sure as hell should not be subsidized by my taxes. And ‘foreign banks’ should not be allowed in either; I’m sputtering on that charming little addition to this ball of crud.
On a related issue, it’s very tempting to go after the obvious targets, the CEOs of these companies that have screwed so many pooches. It is indeed obscene how some of them are pulling in millions of dollars in compensation as their companies go belly up and lose billions; I agree it’s a subject that needs to be looked at.
But the real problem here, as Paco alludes to, the real problem that needs to be addressed is Congress. Oh the Barney Franks and Chris Dodds and Joe Bidens and the Larry Craigs and the Pete Domenicis and the Barack Obamas and the John McCains will all tell us to pay no mind to the folks behind the velour curtain, will point their fingers at those greedy executives and cry “for shame!” But it has been Congress that has allowed these things to go on; it is Congress that has taken millions of dollars in bribes from these various industries; it is Congress that has abandoned any semblance of fiduciary responsibility or moral leadership and has instead used the taxpayer’s sacred trust as merely a fund to buy re-election; it is Congress that has allowed extra-Constitutional “regulatory agencies” to run rampant and legislate with no review or say by the People. This is the primary issue that needs to be addressed; Congress needs to be held accountable. Every incumbent needs to go.
Will we throw out some babies with the bathwater? Sure.
Bummer.
When the bathwater is so fetid even the rare good one is fouled by the contact.
Update: Further reading:
Jim
Ace
Volokh
Another update: Read Eric too.
Nanny State | tree hugging sister | 
September 24, 2008 7:29 am
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Hear, hear!
There is apparently no limit to Comrade Bush and Comrade Paulson’s generosity. With the FBI investigations, maybe we’ll get some scapegoats and show trials thrown in as well.
My father owns a ton of AIG stock, so I’m having a constant war between principle and self-interest.
*headdesk*
Yeah, let’s just allow all the people who behaved irresponsibly to suffer no consequences from their actions. That’ll teach ’em.
I think part of the problem is that everything has become so credit-driven, so much of a “pay in installments” economy, that many people have come to accept that EVERYONE has to have immediate access to large credit lines – even people like, as you note, college students, who probably have no business spending that kind of money.
When I was a student? I lived on beans and rice and had a one-room apartment. It was kind of miserable but at least I wasn’t racking up huge debt. Was I jealous of the kids who had nice wardrobes and went on fancy vacations? Kind of, but I was unwilling to take out the credit cards to finance that.
Seconded, thirded, fourthed… as many as it takes. These pinheads. This is pretty much exactly what happened in 1929.
Ricki, you may have been kind of miserable, but take it from someone who did wind up with an uncomfortable credit card bill (at least relatively speaking) – you can go from “kind of” to “utterly” in style with a large debt like that. It also crushes your credit. It took years to dig out from under, but I did it the hard way and I’m glad I did. Never again.
Dave Ramsey for Congress.
Bush is more like his father every day.
His only strong point, that he is willing to prosecute this war to victory, is marred by the fact that it took him at least three years to adopt a winnable strategy.
But like his daddy, he has never turned down an opportunity to use taxpayer money to enrich his toadies and increase his own power.
He does not believe in less government intrusion in our lives, ever.
And most damning of all, he never deigns to explain or convince the American people of the wisdom of any of his policies. Just like daddy thought debating Bill Clinton (by looking at his watch in such a bored manner) was beneath him and that he had earned reelection before we voted for him, GW seems to think that he can just ride out his last four years without even bothering to get a consensus from us on any of his goals.
Here he goes again. He is trying to get absolute control of an equivalent to almost our entire budget (essentially doubling it). He tried to ram it down our throats in a weekend by presenting it as a fait accompli (oh, I always get in trouble when I try to use frog phrases, I mean that he tried to get it done as though there is no longer any ability to debate the matter, it was already a done deal).
I despair of ever having a reasonably responsible person in the white again during my lifetime. We had one, Reagan, since I’ve been alive. I guess I’ve hit my quota.
And I fear for the future of this nation for my daughter. My parents’ generation and their parents’ generation have destroyed the bedrock principles of freedom that we once enjoyed. We’ve taken a baby step forward with the Heller decision, but we’ve taken twenty giant leaps back. And this week we may be taking 800 billion giant leaps back again.
Oh wow! Does that mean I can stop paying off my student loans now? Oh wait, I’ve been diligently paying them off without missing or being late on a payment so I obviously don’t count. 😛
A military coup at this point isn’t looking so bad to me.
Mr.Bingley.Damn!You write good-or is it well?
You’re absolutely right. Every farookin’ one of them should be voted out of office. Every farookin’ one of them.
The word I have heard for the first time last week was “moral hazard”. The moral hazard of financial organizations operating at greater risk, assuming that Uncle Sam will bail them out.
Here is the other moral hazard. Of my many addictions (of which I an recovering)I was hooked on that opium-laced pie of which Mr. Bingley speaks. This is why I now live in the ghetto, don’t own a car and have lowly dial-up. But I am making good, and should be clear around the time Sarah and Hillary received their parties’ nomination for president in 2012.
It is disturbing that this bailout will not contain consequenses for the guys who ran these companies into the ground. Those like me will wonder, “Shame I owe mere thousands and not gazillions, then I would be too big to fail.”
If I owe the bank a thousand dollars, I have a problem. If I owe the bank a million dollars, the bank has a problem. If I owe the bank a billion dollars, YOU have a problem.