Hate them all you wish, but we need a viable banking system almost as much as we need food to fuel our bodies. That's because, short of barter and absent a viable banking system, we have no means of exchange with which to buy the things--including food--that we need for survival. Banks are the hinge upon which those necessities of life swing.
Last years' $350 billion TARP measure was intended to buy the "Toxic Assets,"- the "-T' and the "-A' in TARP, held by the financial institutions. On radio talk programs and on C-SPAN's Washington Journal, 7:00 am to 10:00am EST. viewer call-in program and on blogs and in op-ed pieces in the print and on the Internet, I've heard, seen, and read folks grousing over the failure of the government to spend the allocated sums, to purchase the toxic assets. Ain't at all that easy. Let's say John and Mary Doe bought or refinanced their home when the estimate of fair market value was $200,000. Since then, in addition to all the stresses that typify every market (divorce, death, etc.), the area is one in which major employers have thrown in the towel and put its workers on the streets, the result of which is an oversupply of homes for sale because they've been foreclosed, or are facing foreclosure.
"Market value"- is the maximum price in dollars that is necessary to purchase a given piece of realty, or its equivalent, at a given date in time. With an abundance of homes, all competing for scarce buyers, the prices sought, and for which a willing and able buyer can be found, just continue to spiral downward; from $200,000 to $175,000; $150,000; $125,000 . . . So, what is any toxic asset worth, or all of them together? How do you know? How can anyone know? The prices just keep falling and falling and falling, and on any given day there's the high probability that the purchaser will have paid too much. And you, as the taxpayer behind the government's efforts, are the buyer.
This past January I turned 63. I experienced the Cuban Missile Crisis of 1962. The United States and the Soviet Union faced off against each other over the fact the Soviets were attempting to install nuclear-tipped intercontinental ballistic missiles in Cuba. (It was only after the collapse of the USSR that we learned the suspected threat of active missiles was at that time a genuine reality.) One errant move by either super-power could have been a life-ending move for planet Earth.
I experienced the Vietnam War. And I experienced both near-depression recessions that occurred under Reagan, and the Market Crash that also took place during his presidency. As with every now sentient American, I watched on television when the twin towers fell in billowing clouds of white dust.
At no time during my life have I been witness to the unfolding extraordinary calamities that now assault the world; the end of lifestyle sustaining affordable oil, life and lifestyle threatening drought, and the potential collapse of economies and governments pan-global. Never before! Never!
There is nothing wrong with relaxing after a hard day, in front of mindlessly insipid television programs. But when the brain boiling bubbling bovine waste precludes the intake of the information requisite to the formation of informed opinions and participation in informed discussions . . . Today? When we're all facing the edge of the precipice?
I have two college majors: business administration and political science. The latter I've lived and breathed passionately for the past 10 years. Contrary to a lot of popular opinion, what we discuss with each other does find its way to government policy. You talk with a neighbor. The neighbor talks things over with those in his or her church group or other civic organizations; PTA, Boy Scouts, veterans associations, etc. The leaders of those groups then carry the message up the line. It's all much akin to ripples in a pond, or, even more dramatically, the butterfly effect. (Yeah, yeah, yeah . . . I know: money talks. But money unaligned with ballot strength fares less well than if it's accompanied by voter sentiment.) In other words, being informed matters. Being informed, especially today, when so much is at stake, matters one hellova lot.
Mindless, persistent indulgence at a time when being responsibly informed is what is called for most is the very apex of as well as the very definition of the betrayal of personal responsibility.