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I can begin by saying that I am opposed to the expenditure of even $7 (seven) tax payer dollars to bailout Wall Street, much less 700 billion. If there were statesmanship added into the situation, it would say, "An unsustainable bubble has run its course in our financial markets." That's a statesman-like way of saying the bubble burst.
The objective of the $700 billion is to allow some of the big boys to play make-believe, as if the bubble did not burst. Why? Because, some big boys want to stay big, as opposed to facing economic reality, in which their luck recently ran out. They want their good times to roll, even though their day has come and gone.
Congressional hearings about the bailout are a sorry and saddening spectacle, in which Bernanke and Paulson try to sell Congress on the idea that, "hey - if we act fast, we can re-inflate the bubble and keep going." This bailout plan won't even work. Next time, they'll be back for $2 trillion, and then $4 trillion, and then $8 trillion.
These big boys are on a slippery slope that could double the national debt, and worse. Predictable outcomes include inflation and the end of dollar hegemony as the world's reserve currency. Bernanke, Paulson, and Bush, even while they might adamantly deny it, are asking for the legislature's blessing to bankrupt the nation.
They don't have knowledge that they will really get ahead of the problem by having this bailout - it is simply a maneuver that they are willing to try. They are willing to try, because it won't come out of the pockets of Bernanke, Paulson, and Bush. They aren't playing with their own money. They're coming for yours.
What should have been done years ago is to stop the madness and to stanch the financial cancer. It remains the best advice now. Instead, Bernanke, Paulson, and Bush think they have a plan to continue the madness by continuing the bubble and distorting the free markets even more. If they want to avert their eyes from reality, they could go to a movie. It doesn't take $700 billion.
This administration long ago spent its political capital and shot its own credibility. Now, by embracing the bailout concept, Senators McCain and Obama are shooting their own credibility. What we are seeing is dismaying. It becomes self-evident that John McCain and Sarah Palin are frankly not qualified to be leaders of this nation.
But, it is also regrettable to see Barack Obama sucked in to this "loot the nation" game - one that is of the swindlers, by the swindlers, and for the swindlers. The right thing to do is to let the bubble unwind. Even if one could re-inflate the bubble, remember that (a.) it is a bubble and (b.) it is unsustainable, which means that after consuming $700 billion, it will be back for more.
What happens if the bubble is allowed to unwind? --The over leveraged guys will get blown out of the market. That sounds (and is) entirely in line with normal capitalism. To over extend yourself is not prudent. And yet, George Bush and company, from their panic, would say, "Wait a minute!! There will be cascading cross defaults!!!"
Well folks, I am a computer programmer. They need not introduce me to cascading events. To George Bush I would say, "Yes, little grasshopper. There will be cascading cross defaults." And furthermore, that is exactly how to identify "which guys are over leveraged." So the net effect is exactly as I said above: the over leveraged guys will get blown out of the market.
As far as I'm concerned, derivatives continue to be a Wall Street concern, not a Main Street concern. The day after defaults, I expect that my nearby muffler shop will still be able to fix my car, and that my nearby coffee shop will still be able to serve me coffee. All the functions of Main Street (like fixing cars and serving coffee) were learned behaviors that were developed and perfected long before derivatives became a cottage industry (and then the whole industry) on Wall Street. Main Street got up and went to work before derivatives; and, Main Street will get up and go to work after derivatives.
The ordinary crew on Main Street is not over leveraged. Instead, they are over taxed, under paid, lacking benefits like health insurance, and generally under employed. It is said that two thirds of Baby Boomers have saved nothing for retirement. That means, they don't even have exposure to the swings and gyrations of the stock market. Instead of worrying about Paulson's buddies on Wall Street, what if a politician decided that the situation of Main Street is serious?
Indeed, if politicians were doing their job and advocating for their constituents, they would not bring the problems of the big boys to the little guy. Instead, they would bring the problems of the little guys to the big boys. The Wall Street default may soon turn big boys into little guys, a turn of poetic justice that may also find that they will come around to agreeing with the concerns of the little guy.
So much for the over leveraged guys. Now if we could also find a way to bring down the posturing buffoons of the mainstream media - those who are over stilted. There are old school political pundits who can be described as "stilted off the planet." At times when I watch TV (e.g., when David Gergen tells me there's no inflation), I wonder "What planet are they reporting from?" It seems that news falls into two categories: that which they are distorting, mangling, or spinning, and that which they are ducking, dodging, and avoiding.
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