Originally posted by: K1052
Originally posted by: BigDH01
700B is not a "fix," it is a band-aid. One that may or may not actually work.
We can certainly argue whether this dilemma is false. I don't assume that regulations put in place after this mess will
A) address every contingency and close all loop holes
B) remain in place given the corrupt nature of our gov't
Of course, drastic new regulation changes the nature of the game. It likely means less credit, less spending, lower returns, and a lower quality of life for the rest of us.
Regardless, I believe this bill is only the "band-aid" and doesn't address any new regulations or controls. Wall St is clamoring for a bail out right now but how are they going to feel after they get their money? Are they going to ask for the government to restrict their activities? Who's really running the show on Capitol Hill?
I prefer to try the band aid before cutting off the entire arm.
Some of those changes are already happening on their own. Goldman and Morgan are to become holding companies which are subject to much more regulation and stricter leverage limitations. Some of the other I banks with probably follow suit.
The end of easy access to cheap cash will humble the hedge funds (the ones that make it) into less aggressive entities.
With the election looming and both candidates exploiting the public's unhappiness about this I think more regulation will be coming down the pipe in the relatively near future.
Band-aids work when you're dealing with a cut. In this case, I believe the condition is more closely related to gangrene. The disease that infects this nation is of far greater magnitude than the failure of investment banks or creditor institutions. This is merely the tip of the iceberg. This country, from the top down, is addicted to debt. The citizens, companies, institutions, and government are up to their eyeballs in it. This is the cancer. Maybe cutting off the arm will show real resolve to stop the spread here and now. Maybe it will return us to fiscal and monetary responsibility. Maybe people will look to the future and start to actually address our quickly approaching financial liabilities. Maybe something will actually get done.
Look, I'm going to take a very unpopular stance on this. It seems that this bailout is receiving support because it will prolong the situation letting positions slowly unwind. My question is: do we really want this to go slowly? Do we really want to avoid a depression? Perhaps it is due to my age or inexperience in life, but I see opportunity in the ashes of a quick unwind. My whole life I've been frustrated by the "average Joe." I can have perfectly reasonable conversations with nearly everyone I meet and I sense a lot of anger and mistrust of top executives and politicians. Despite this, most people seem far more interested in the score of the Cowboys Packers game than they do in enacting social change.
Just look at these forums. You see a lot of mudslinging to the left and right yet I feel that the wisest of us realize that the problem does not lie in Republican or Democrat but in every politician. It lies with people who are so obsessed with being on the right side that they can't see the game for what it is. And why most people are chasing their tales, the rich get richer, politicians have sold out to corporations, wars are being raged around the world for God knows what, and our future was sold to put Bob and Jane American in a home they never had a chance of affording. As long as people can go home, watch TV, drink a beer, and repeat this the next day, nothing will change.
The problems about to face humanity are simply too great, complicated, and many for people to not be concerned. In this light, I can't understand why so many people favor a bailout that will inevitably result in "more status quo."
The Great Depression was obviously named that for a reason. A lot of people hurt and hurt badly. However, many social changes came about because of this event. I have confidence that a drastic change in the status quo will awaken people to their social and civic responsibilities. It may make people open their eyes and demand control of their future and their country. People might start to demand social justice and realize that governments should be functional and aid citizenry. Although a Utopian society is probably never achievable, the path is noble and progress can always be made.
Of course, I'm an idealist. I think a rapid change can be a good thing even if it leads to short term pain. I think that humanity can learn from its mistakes and create something better. I believe people will help each other and that it will bring us together for a greater cause (not war related). We can build more successful institutions from the ashes of the failed.
However, I may be completely wrong and it will be a Rome-like collapse leading to another Dark Age and centuries of local warfare. Now I'm talking like a realist.