Oh, I take what is happening in the entire investment community very seriously. If I had the ability to fix the situation I would do two things:
First, I would sanction All of the actors who created this situation in the first place. Right at the top of list would be the Fed Gov’t which—through MAC and MAE—started the ball rolling when it raised the requirement for low income mortgages from 20% to 50% of mortgage industries total mortgages a few years ago. Then I would prosecute all of the CEOs and senior management people in Bear Stearn, Lehman, AIG, Merrill Lynch etc. for criminal irresponsibility—not to mention fraud. These people get paid huge amounts of money because they are supposed to be smart. There is no way they did not know what the end game would be for loaning money to people with poor or worse credit history. Poor credit risks are poor credit risks for a reason. When the industry started giving out loans to people without income,or insifficient income, to cover a minimum monthly mortgage payment today’s situation was inevitable.
Second, government’s role is not to bail out businesses who fail—for whatever reason. That is not to say that if I were US president I would not take an active role in facilitating private sector solutions. But, let’s take a look at what history tells about gov’t (tax payer) bail outs. Crysler got one back in the 80s. True,it was essentially a bridge loan which—to Chrysler’s credit—was paid back early. But, what do we have today? Without a doubt Chrysler will be seeking another get out of jail free card soon—along with Ford and GM. So what did Chrysler and the other car companies learn? If they make bad business decisions gov’t (the taxpayer) will bail them out.
On top of that you would add all the failing financial companies that are going belly up. Well, where does it stop? If permitted, the market takes care of poorly managed companies. They go out of business. I’m curious, why would you want poorly managed companies to survive in the first place? And please, spare me the argument their failure will be devastating for the economy. In the short term, that may be true. But allowing them to survive only puts off the inevitable—remember Chrysler. Do you think propping up bad businesses encourages or discourages the behavior that got them where they are?
McCain’s economic advisor, former senator Phil Gramm, then USB bank of switzerland paid lobbyist was also the co-chair of the committee that rewrote the banking legislation that created this financial meltdown in 1999.
Both parties are corrupt, and both parties show the corrupt corporatist fascist relationships that are becoming the downfall of America.