After the news reports of the failure of President Bush's bailout plan to be passed, the news reports are all over the place reporting losses of over $1 Trillion on Wall Street, a British millionaire jumping in front of a train, and John McCain's derailed campaign after his premature boast of flying into D.C. to bring his Republican colleagues on board to make the bailout happen.
And the morning after, my son got up as usual to get ready for high school, my husband paid a few bills, showered and left for work. My daughters woke up, dressed, ate breakfast and ran to the bus stop to play with friends before first grade. I talked to the other bus-stop mom. My younger daughter watched her PBS Kids morning show and I drank a latte.
The sky did not fall, the "sucker" didn't go down overnight, we are still in our home, and there was breakfast on the table.
While this is the greatest economic crisis since the Great Depression, lessons and regulations in place from FDR made it possible for most Americans to still have their savings, still eat, and still go to school. There are definitely middle class and lower income Americans struggling to feed their families and fill up the gas tank, but this was the case before September 15th. That is the point, rash judgements never pan out.
The Republican Party, quick to not want government intervention, came to the government to give them a blank check for $700 Billion to bail out their overwhelmingly Republican CEOs on Wall Street. Then something happened. Blame is flying around faster than the softballs did this summer. It isn't the Democratic Party that upheld the vote, they brought their votes to the table, howbeit it somewhat reluctantly, but they brought the changes they felt needed to be in place to address the crisis. The Republicans got upset and didn't vote, they are worried more about re-election than what learned economists say is a potential financial tsunami.
Where do we go the morning after? Clearly something has to be done and that is the point. It was to be a bipartisan effort because this happened under the watch of a Republican president who was big on letting the markets do their thing. The markets should correct themselves but have shown that without regulation, they are like a bunch of 4-year-olds let loose in a candy store.
The remainder of 2008 will be critical. There has to be oversight. CEO salaries and bonuses must be reigned in. The ones who benefitted from the mortgage bubble must also be the ones to pay for the mortgage meltdown. In my book, that would be the brokers that cohersed some buyers into subprime loans that gave the broker higher commissions. Yes, some homeowners took a bigger bite of the pie and are feeling the repercussions of listening to the high-pressure sales tactics of the used-car-salesman tactics of the mortgage brokers. But it isn't Main Street that stands to walk away with millions even with the bailout.
Warren Buffet, who made his billions by buying up companies, has infused money into the market. What does he know? It will come back up and the buy low will eventually turn to sell high and his portfolio will get even fatter. Fine, that is how markets are supposed to work, but on the taxpayers dime? No, the taxpayer should profit from this deal. What about forgiving the loan for the bedraggled homeowners? Or the student loans of the graduate students who haven't been able to find employment in their field in years? Or turning back the capitalized interest on those loans back to the original amount of the loan? Or redressing bankruptcy rules to benefit Main Street that has gone bankrupt due to the skyrocketing health care costs?
It's a fire sale yet the ones who started the fire are standing there looting the remains. That is the part that has people at my local coffeeshop upset. My little suburb is filled with "at-home moms" with masters degrees that can't find meaningful work. They all rationalize that they want to be there for their children and involve themselves in volunteer work, but the reality is that the professional jobs, particularly in industries like marketing/advertising/communications dried up back in 2003 and 2005. This "economic crisis" isn't news to those on Main Street. It is just a "crisis" because some millionaire can't buy another boat or give his wife a $300,000 outfit.
So, the morning after, the sun is shining, the neighbors still got in their cars to drive to work, the homes were still standing, and the kids are still in school. Perhaps it is the calm before the storm. Or perhaps it is just wisdom kicking in that says after Rosh Hashanah, the Congress will return, sit down like logical, smart, elected officials to craft legislation that is bi-partisan with true constraints, true benchmarks, and clear oversight to benefit the entire economy and not just the select few at the top. The President will not get on TV with one of his "scare tactic" messages and the media will stop sensationalizing the whole thing for ratings.
There is hope in the morning after. Perhaps this is when we need the wisdom of Solomon.
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