Right now, our President, George W. Bush, is meeting with Bernanke and Paulson and his strongest campaign contributors, investment bankers, to come up with what is basically a bail-out for Wallstreet. They're going to try to push the formation of a RTC or RFC.
I'm agin it.
Here's why:
- Bush wants the stock market to be up by the election. Whether it should be up or not (it shouldn't), he wants it up. This is nothing but a gift to John McCain.
- The market is WAY overvalued right now, considering toxic debt. Doing anything right now to try to carry that inflated value over to the other side of the election, DOES NOT make that value real.
- CONGRESS must approve this. There's no way Congress has the time to educate themselves about the ramifications (to the taxpayer) of this complex move in a short time. So they'll have to take the word of who? George W. Bush. That sound like a good idea 6 weeks upstream of an election? To do whatever George W. Bush wants you to do? Congress? Does it?
I'm anticipating some arguments against my position on this, so lets get those out of the way.
What about people with 401ks? They're in danger of losing everything!
No. First off, only 21% (I've seen numbers from 19% to 26%) of Americans have 401ks. So Congress looking after their interests alone is difficult to justify. Second, if the DOW falls to 9000 (where it would naturally stabilize), people with 401ks, on average, will lose an additional 20% from where they are today. If people with 401ks lose everything, they chose a risky basket of investments. Who's fault is that?
Our financial system is collapsing!
No. It's not. It is correcting. It is correcting because of poor regulation and because rich folks weren't happy enough with Bush's tax cuts, they were so greedy they tried to take as much as they could. Now Bush wants to bail them out, putting taxpayers at risk.
What about jobs? If the stock market crashes, unemployment will skyrocket!
Do you really want to use this "trickle-down" crap argument? Really? Then vote for McCain/Reagan/Bush. Unemployment is GOING to increase because Bush was president for 8 years. This isn't going to change that. The mix of the unemployed will contain more people from the Financial Services Sector but the number of unemployed is going to go up whether Congress goes with Bush's idea or not.
To hell with Obama getting elected! This is MY MONEY!
Who do you think will give you a better chance of recovering your losses? John McCain or Barack Obama?
Got more objections to my saying this is a gift to John McCain? Puttem in the comments and lets flesh this out. I fear Congress won't do that.