Driving home tonight, I listened to the President talk about the need for the 700 billion dollar bailout package. A feeling of terror gripped me; I am deeply, sincerely afraid that he might get away with this. For a long time, some of my more liberal friends have been pitching me conspiracy theories about George Bush and how he has turned the US government into a big cookie jar for all his friends to loot. They point to all the no bid contracts in Iraq, including the contracts of American oil companies to manage Iraqi oil assests. For a long time, I've resisted these conspiracy theories, choosing to believe that Bush was most likely doing what he believed was best for the country, even when I deeply disagreed with him.
However, after listening to this bailout being debated for a week, I'm now convinced that this is, in fact, nothing but a scheme to enrich a small handful of wealthy, well-connected people at the public trough. 700 billion dollars is a staggering sum of money that is going to wind up in the hands of a relatively small number of people. I have yet to hear one economist say it's actually going to solve the financial problems on Wall Street. I've been hearing dire warnings that the market may fall to 8000 in the coming days if action isn't taken. My 401k is already taking hits. It' scary to look at. But, here's the thing: if the stock market falls to 8000, it's because it's only truly worth 8000. If it's actually worth more than 8000, then people like Warren Buffett are going to sweep in and buy everything they can lay their hands on, because it will, eventually, rise back to it's true value. The government's actions seem to be dedicated to blowing more air (or, in this case, money) into a bubble that is rapidly collapsing. Why, why, why, why does it make sense to anyone to keep a financial bubble growing past the point where it should naturally collapse in on itself? Bailing out Wall Street now is going to be the equivilent of giving all the people defaulting on subprime mortgages high-limit credit cards they can charge mortgage payments to--which, believe me, some people have no doubt done. Blowing money into the bubble now is only going to make the collapse in the future far, far worse.
So, for the first time in my life, I've written my congressman an email. I doubt it will change a damn thing. But, I encourage you, if you are opposed to this bailout, or even in favor of it, to take the time to write your congressman. It's easier than ever these days. Two minutes on google will produce your representative's webpage and email address. We may see congress write the largest check of all time within the next week. One reason we're in this mess is American's have been willfully blind to most actions of congress and the administration. If you are ever going to make your voice heard, this is the moment to do it.
Here's the letter I wrote:
I would like to add my voice to the flood of email I'm sure you must be getting against the proposed 700 billion dollar bailout. This is being sold to the US public in the same doomsday terms used to sell the Iraq war--then, we were warned of nuclear weapons, today we are being warned of long term recession. But, saddling the taxpayers with another trillion dollars into debt is insane. The very heart of our financial crisis is that too many people have been buying things they can't afford on borrowed money. Homeowners have bought houses using loans they couldn't afford, banks have made the loans using the plentiful credit available on world markets, and the US government has been helping create an artificial boom economy by spending hundreds of billions of dollars more than it takes in each year in taxes, purchasing the illusion of prosperity today at the expense of future generations.
The time has come to obey the first law of holes and stop digging. If the stock market collapses and credit markets freeze up, there will be a lot of pain, but it's a neccessary hardship to endure to get our economy back on track. A tight credit market will kill subprime mortgages and marginal credit cards, but I predict that responsible borrowers will wind up highly sought after and the credit market that emerges will be more restrictive, but sounder. Borrowed wealth isn't true wealth.
If the stock market falls to 8000 or lower, that's because that's the true value of the market--I don't see it as government's responsibility to artificially inflate markets. Yes, a lot of people will take a serious financial hit as their 401k's fall. I had been looking at my 401k as recently as last year with daydreams of early retirement. But I'd rather not build my life around a lie, where my wealth depends on an ever growing bubble. Sometimes, you have to let the bubble pop to find out what the true value of things are.
The right thing for you to do in the coming days is to just say no to any bailout at all. I hope you will have the wisdom and judgement to resist the president and leaders in your own party to make this stand. If you choose to reply, I would like to know how you intend to vote on this bailout.