RSSWhat’s Wrong with Government in the 21st Century … Politics … Senators to Skip Bail Out Vote?
People continually ask, what is wrong with government in the US? Why do politicians not do the work of the people? That question is not posed to just one party, its a pox on all of the Democrats, Republicans and Independents. The problem with government, is politics.
As the Congress faces one of its biggest and most important votes ever and the largest governmental intervention in the financial markets since the Great Depression, it appears that all 3 Senators on the Presidential tickets will miss the vote. How sad that we live in a time where Obama, Biden and McCain feel they cannot cast a vote because of the fear of what it will do to the politics of running for President. What ever happened to a time when a candidate voted their conscience, supported their decision and put forth their vision to “We the People”. The sad reality is that any vote, any comment will become exploited by the MSM and the opposing campaigns.
If we ever needed a President who could reach across the aisle and end some of this complete nonsense in DC, now is the time. It is up to “We the People” to make that choice as to who has done it in the past and who can do it now. End politics in Washington and make the government work for the people again.
Posted September 23, 2008 by Scared Monkeys Barack Obama, Government, John McCain, Joseph Biden, Politics, Presidential Election 2008 | 11 comments |
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11 Responses to “What’s Wrong with Government in the 21st Century … Politics … Senators to Skip Bail Out Vote?”
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Meanwhile, today the stock market began higher but ended lower after it became apparent that politics is going to delay adoption of the bailout package … of any bailout package.
I won’t be surprised to see the Dow test 10,000 … and maybe go below?
Minnesota Dad, if you read this … I don’t know what anyone here does for a living, but you said that you were involved in entrepreneurial activities. My apologies if I’m wrong.
If I’m right … I’m not asking that you be more specific about what they are, but you will have closer first-hand knowledge than most of us about sentiment in business circles and getting bank credit these days for business.
I’d appreciate your giving some info, and I’m sure we’d all be interested in seeing it. Thanks.
Well, let’s see…
small business loans go to fortune 500 companies,
Golden parachutes dot the sky,
some self-proclaimed economic healers(quacks called Bernacke and Paulson) demands a blank check for 700 Billion(to start, I am sure.) with NO QUESTIONS ASKED.
I hope that we have not become that brain dead yet to throw that money(which will go straight to the CEOs that economically betrayed our country, I am sure and/or to China)down the proverbial toilet.
We need an intelligent plan, not pitching pennies and hoping it hits the line. .
I do not want to socialize the losses of clowns whose greed got us here. They sure knew how to privatize the profits.
I see another ride we are being taken on, folks. Enjoy
Newt Gingrich was on Greta’s show last night… and he don’t think much of this package.. He said the guy who hasn’t got anything right wants a blank check now, with all kinds of stuff tacked on.. Michelle Malkin said yesterday the guy wanting it, wants like 25 billion for IMF in Africa..Gingrich said he.hasn’t got anything right yet, so why trust him again.. He said ask for a second package.. Personally, I think they should lower mortgage payments for many of these and let them pay lower payments.. Gingrich said Japan was in a mess for 14 years because of what they did during a financial crisis.. I also think they should go look up these CEO’s sitting on their yachts in some other country and hold them all accountable, and make them pay.
If we are as close to a depression level economic upheaval as the bailout proponents claim, $700 Billion simply won’t be enough to avert most of the damage. Recapitalized financial firms will want to hold reserves to survive the inevitable recession and will sit on their taxpayer provided equity rather than lending it out.
If we are a bit further away from disaster, and in a situation where a few hundred billion will actually help, then we have time to come up with a more transparent and politically viable rescue plan than writing a blank check to a Treasury secretary who will be cleaning out his desk before 120 days are out.
Either way, any politician who votes for the bailout will be sorry come Fall 2010, when the negative consequences to the taxpayer have become obvious and the perceived benefits forgotten. This plan is either going to go down in the public mind as a bailout to Wall Street (if Paulson gets his way) or a bailout to Wall Street and Real Estate speculators (If Frank and Dodd get theirs). In the midst of what’s likely to be a deep recession, that’s going to be political poison for whoever swallows the blue pill on offer with this “plan”.
Meanwhile, while the politicians fiddle and calculate partisan advantages, our country burns ….
Perhaps it’s time to show “The Grapes of Wrath” again?
However, I think that the famous concluding lines would be lost on the young people of today:
“We keep going on and on, ’cause we’re the American people!” (Taken from a long-distant memory.)
Richard,
The government fears the complete meltdown of the finance system. Banks will tighten up everywhere. They already have in the home mortgage area.
In the business world here is what can happen – many small to medium businesses have asset based loans (the bank provides credit lines and underlying equipment loans based on the value of the assets). Companies that may be in default of their loan covenents (benchmarks, often not profit based) will find themselves receiving letters that they will be shut down if they don’t refinance with someone else or shell out some money to get the covenents in-line. When the companies fail, the banks will move in knowing that they have the asset values to cover their debt. Boom….banks convert assets to reserves and reduce lending exposure.
As banks continue to retract issuing credit the economy will falter further, and begin effecting large companies. While a large company may be capitalized to weather some turmoil…they will begin ‘laying off’ in massive numbers in order to minimize cash flow drain through a downturn. Wouldn’t be surprised if you would see 12%+ unemployment as a result.
While this is happening, credit card companies will suddenly reduce credit limits or even freeze the ability to charge anything additional on the cards. Your $20,000 credit line becomes $2,000.
Home loans are already shut down. Most Jumbo loans need to be done as ‘portfolio loans’ by banks because the usual creditor marketplace doesn’t want the risk right now. You’ll be able to get a loan if you put a minimum of 20% down and have a credit score in the 725+ range!
In the end, what those pushing this bailout fear the most is the complete unraveling of the whole system resulting in widespread financial strife, unemployment, business failures, and more.
Don’t forget the stock market will go southward with the Dow dropping to 8500 or less. Think of all the 401K money, IRAs, and other money that will disappear as a result of the drop. Heck, i would love to know where John Kerry is putting his money right now….that would be the ultimate inside trade as to how the government sees this playing out!
I am definitely not a big fan of bailing out private business….but I believe the costs will be astronomically worse than the $700 billion proposed.
What ultimately chaps my hide is that the CEOs of Fannie and Freddie fleeced $100million plus in bonuses for themselves all while bringing down our complete financial system….and now we are paying those bonuses through the bailout. Nice work boys…..
md
Thanks for your comments, MD. What I was really hoping for was a sense of what you yourself are seeing these days, assuming that I am right in that you are engaged in entrepreneurship.
In other words, the lowdown on what you see banks doing and not doing these days … and whether credit really is a scarce commodity right now.
But thanks anyway!
And, of course, I’m not asking for personal info.
If you have your credit lines and other loans in place you are fine.
If you want to expand your operations (I am in manufacturing) you will find yourself having to present the banks with a perfect balance sheet and P&L. Credit has already tightened up.
You will see considerable growth in asset based lenders. These are lenders that lend money against solid assets (accounts receivable, equipment, real estate, etc.) as traditional lending becomes difficult.
I personally have not had any issues with my business, but also have not had to call my banker for credit in the last few years.
As I mentioned earlier, the problem with asset based lending is that it is laden with covenents (essentially ‘easy out’ of the agreement for the banks if you don’t meet the covenents). At the first blip in your sales volume, profit, inventories, etc. the asset lender can move in. I had a business fail once in this exact scenario, it was the end of the year, bankers were looking for their year end bonuses, they came in on Dec.22nd and pulled the plug because I was out of line on a covenent. Bank comes in, took my accounts receivables and shut me down. Learned my lesson….stay away from banks as much as possible. Stay away from asset based lending if at all possible!
In conclusion, I could get loans today because of my business’ financial position and relationship with my bank. I don’t see this changing in the near term personally.
md
Thanks for the insights. I would think that, with the dollar being so low vs. other key currencies, manufacturing is set for a great rebound in our country. But we’ll see….
I would assume, too, that one problem with asset-based lending following the real-estate debacle is that the assets pledged will have to be top, A-1 value. At least until the picture clears up.