(Untitled)

[my_rain_face]

So. . . I seek the thoughts of wiser people on my friends list

Comments

[fetha]

It's actually $700 billion - but even though my life right now revolves around the financial industry, I don't really understand it myself

[my_rain_face]

$700 billion makes a lot more sense. As I was typing that, I was thinking, "Dude, $700 million is pocket change, this has to be wrong." Brain fart.

I don't understand how Republicans can justify nationalizing a financial institution (AIG), but nationalizing health care will apparently turn us all into huge Commies?

Heh. That's GOP logic for you. Socialism for the rich and free enterprise for the poor.

I talk to normal, middle-class people every day whose nest eggs have been diminished because of the economy, so it's not just something that's affecting the rich.

This is definitely true. That said, the cynic in me honestly wonders to what extent this proposed bailout will help those people, and to what extent it will just bail out the stockholders while leaving the debtors/consumers in the lurch.

Your ranting has helped immensely. Thank you!

(ps: totally hadn't friended you yet. Oops. Fixing that now.)

[my_rain_face]

Yeah, as I've been reading about this more, it seems like I was on target with that last point: this whole $700 billion plan will go towards bailing out corporations without addressing the underlying problem of foreclosure rates and average Americans who have watched their nest eggs shrivel up and die. It seems like the idea is for the government to buy up bad assets, so that threatened financial institutions are given the space and leverage to rebuild upon whatever strong assets they still have. Nobody has addressed exactly what the government is going to do with all of these bad assets that it buys up, but people seem puzzled by the idea that the end result won't be that the government suddenly owns a controlling share of the corporations it bails out (ie, we're not looking at a whole lot of mini-AIGs). And if the government does end up with influential stakes in all of these institutions -- I really don't see how it couldn't, but I'm probably missing something -- what's it going to DO with them

[sangria_lila]

From what I understand of it though, if the government doesn't buy out, then that would make credit even harder to get because no one would be willing to invest capital. I could be totally wrong though.

[lostsailors]

I would be more interested to learn this as well. In my gut it feels like a wrong approach, but I don't know anything or why.

[my_rain_face]

If you haven't ventured back here since posting -- there are several good links in the comments!

[euryale000]

From what I understand, the plan as it stands is essentially to give these banks 700 billion of taxpayer money in the hopes that it makes everyone feel better and the problem go away. In the other bailouts that have happened recently, the government has bought the debt with taxpayer money but then also taken over control of the companies, with the idea that they will now be run differently. This one is just a freebee. that's why people are pissed about it. Can I find the NYTimes article that told me this?...

I think this is it -> http://www.nytimes.com/2008/09/22/opinion/22krugman.html?em

[euryale000]

here's some more

http://www.nytimes.com/2008/09/23/opinion/23kashyap.html?em

[my_rain_face]

You are a rockstar. I'll peruse this over breakfast tomorrow.

[circe_pleading]

http://www.huffingtonpost.com/arianna-huffington/the-bailout-plan-welcome_b_128450.html

Huffington Post helped me to understand a little better; haven't checked Talking Points Memo yet though, they might have something too.

[my_rain_face]

Oh, awesomeness. Thank you!

[wholesomelymid]

Oh good, it's not just me who doesn't get it (I thought it was because I was hearing about it on Spanish TV...) Thanks for posting this. These replies look helpful.