Received these thoughts from a friend who is an executive at a major bank and thought they were worth passing along:
I've been posting comments and e-mailing my pols to not approve the bailout. There are many banks and other financial institutions (like credit unions) that would not fail if the bailout were not approved. Here's some questions I'd really like to hear:
Secretary Paulson, you're current estimated stock ownership of Goldman Sachs is about $500M, does that affect your thinking about the bailout? How about the many friends and co-workers who still work for financially troubled banks?
The situation that everyone describes as so urgent and dire has not changed substantially in the past few weeks except that the market is finally eviscerating the worst offenders; in fact, some commercial paper stopped trading this past spring. Why is the problem so pressing now that we're being told we can't hear what Secretary Paulson and Reserve Board Chairman Bernancke told congressional leaders how bad things would be if the bailout were not approved, without comment or changes? Why can't this wait a little longer, say after the election?
On a Sunday morning politico talk show Secretary Paulson briefly made a comment about this problem possibly extending overseas. Really? Did he get a call from China saying that they weren't going to buy federal debt anymore (which has devalued substantially in the past few weeks) which would prevent the federal government from operating after the cash runs out?
Lastly, here's what I've been posting: We should let the shareholders, officers and directors of the troubled institutions bear the burden of this fiasco and we ought to investigate, and perhaps prosecute, the credit rating agencies (which had Lehman rated Aa the week before it declared bankruptcy). Instead of spending $2,300 per person on a bailout (throw in another ~$2,300 for all the other rescue efforts they recently commited to) why not spend that on public works projects like bridges, dams, alternative energy research and implementation - which results in payrolls, payroll taxes and improvements to our economy? Is padding the wallets of shareholders going to stimulate the economy?
There's a possibility that all this bailout money won't do a damn thing to save many of these institutions anyway. It's a scandal.
I would be interested to read the thoughts of others like my friend who actually know something about this stuff (I don't). I would especially be interested in people's take on my friend's view that this could probably wait until after the election. Although where he would get the idea that this Administration would trump up a crisis right before an election, I cannot imagine....