Any time the government has to rush a big spending bill to approval, watch out.
I've been looking for information about what kind of benefit the government expects the bailout to yield. I haven't found much.
http://money.cnn.com/...
Apparently some think not bailing out the banks will lead to big job losses in the financial markets and an even tighter credit crunch. I'm not convinced a bailout is going to change the inevitable. Why is the government hiring bank tellers and not doctors? What about all of the people who have been laid off throughout history because there was no need for their jobs any more? Or in the first place? (jump!)
As for the bailout keeping the credit valve open, I don't think backing the truckload of taxpayer dollars into the bank vaults is going to change much:
http://money.cnn.com/...
Housing is in for a major correction. Banks are offering sane loans again. What wrong with this picture? Not much, so far as I can tell. And if there is, there's not much the government can do about it, for all of their deep pockets of our money.
Let's hop in the wayback machine. Set the dial to October 1929 ...
http://en.wikipedia.org/...
" After an amazing five-year run when the world saw the Dow Jones Industrial Average (DJIA) increase in value fivefold, prices peaked at 381.17 on September 3, 1929. The market then fell sharply for a month, losing 17% of its value on the initial leg down. Prices then recovered more than half of the losses over the next week, only to turn back down immediately afterwards. The decline then accelerated into the so-called "Black Thursday", October 24, 1929. A record number of 12.9 million shares were traded on that day. At 1 p.m. on Friday, October 25, several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank. They chose Richard Whitney, vice president of the Exchange, to act on their behalf. With the bankers' financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As amazed traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to a tactic that ended the Panic of 1907, and succeeded in halting the slide that day. In this case, however, the respite was only temporary.
"Over the weekend, the events were covered by the newspapers across the United States. On Monday, October 28, more investors decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 13%. The next day, "Black Tuesday", October 29, 1929, 16.4 million shares were traded, a number that broke the record set five days earlier and that was not exceeded until 1969. Author Richard M. Salsman wrote that on October 29—amid rumors that U.S. President Herbert Hoover would not veto the pending Hawley-Smoot Tariff bill—stock prices crashed even further."[6] William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks in order to demonstrate to the public their confidence in the market, but their efforts failed to stop the slide. The DJIA lost another 12% that day. The ticker did not stop running until about 7:45 that evening. The market lost $14 billion in value that day, bringing the loss for the week to $30 billion, ten times more than the annual budget of the federal government, far more than the U.S. had spent in all of World War I.[7]"