Thoughtmagnet

Oh boy…

Just when you thought that you couldn’t fuck things up more, the US Congress has gone ahead and demonstrated that they really don’t have a clue what’s going on. This is really troubling.

I’m not troubled by the fact that the bailout package failed - it was a flawed bill, and there were good reasons to vote against it. Unfortunately, this package failed for the WRONG reasons.

The bailout package failed, not because it was flawed, but because more than half of congress doesn’t understand shit about finance and economics, and it’s those people who are running the show these days. If they had voted the package down over technical details, or because they wanted more oversight, I would understand - but they didn’t vote it down for that reason. They voted it down because they are unable or unwilling to understand the consequences of the impending crisis.

For example Representative Darrell Issa, a Republican from California, said to support the would be like placing “a coffin on top of Ronald Reagan’s coffin.” (What?) Or they’re against this bailout because their constituents don’t support it, which is also stupid because your average person can’t be expected to understand the significance of the problems the US economy is facing - this isn’t a simple problem that you can figure out by watching Fox News.

The US government needs to do something, not to bail out Wall Street, but to keep these credit problems from screwing up everyday life in America. We’re at a point where profitable factories are going to close because they can’t get the credit to buy their raw materials, one where you can’t buy (or sell) a car without $20,000 cash. Banks will go down left and right, wiping out people’s savings (only your first $100,000 in an account are protected) and crippling business.

Oh, and home prices will probably fall even further if that happens, which will compound the mortgage crisis and screw over everyday people even more.

A bailout isn’t about helping bank executives, or stockholders (though they may benefit), it’s about helping the innocent depositors, debtors and businesses that deal with the Banks. Yes, stockholders and executives may benefit, but government has to rescue the good with the bad. It’s as if we’re all on the Titanic, and the Republicans seem more concerned with ensuring the captain drowns than saving the ship.

It’s that kind of idiocy, more than any problem in the markets, that concerns me now.