I realize this is more opinion than diary. But I am feeling less and less every day like there’s a real problem here that we can’t solve without this bailout?
WaMu crashed, and the FDIC stepped in and solved the situation (thanks FDR and the New Deal). This what they exist for. According to media reports nothing happened to the bank’s depositors or employees. Sign on the door probably still the same.
If we have a liquidity problem, don’t we have other options to deal with that? Can’t the gubmint buy or refinance the bad debt and mortgages? For less than $700 billion?
My 2 cents:
* focus on the bad mortgages. Refinance them, whatever. How much money is that? One number I saw says about $100 billion.
* transition the failing companies through the market place and existing government programs (ala FDIC)
* reforms and regulations to end the BS securities and other shenanigans that helped cause the meltdown.
* prosecute if there is criminal liability, as opposed to the usual Wall Street greed/stupidity. Treat them like drug dealers: seize assets, ban any employment in finance/banking/real world jobs.
This feels like the days of terror color alerts. Or the fearmongering over same sex marriage. The sky is falling, civilization is coming to an end. My marriage is threatened.
Now would be a good time for Barack and our own Barney Frank to call a time out on this, rethink the urgency, calm everybody down, and come up with some effective answers. Ones that cost a lot less than $700 billion.
That’s not the sky falling, that’s just rain.