This is a very popular topic right now. A couple of observations from someone who is very skeptical of anyone who says "I'm from the government and I'm here to help you".
The 2 guys ( Bernake & Paulson) who are preaching that we've got to do something right now--aren't they the same 2 guys who preached most of this year that everything was under control? And wasn't Paulson an investment banker for many years walking in the shoes of the folks he's now asking us to hand this money too?
Congress: most of these folks have been there too long and have spent years protecting some of the same industries/executives they now accuse of leading us into this mess. Now some of them want us to hand over $700 billion to fix this? And aren't many of them the folks who hastily passed the Sabonis Oxley legislation post Enron which requires these institutions to "mark assets to current market value"?
$700 billion comes out to an average of more that $23,000 per person in USA. That's every person--babies, kids, homeless, millionaires and everyone else in between. Does this figure include what's already been committed to Fannie, Freddie, AIG, etc. or is it an additional amount? No, it's additional because AIG just accepted their $85 billion, and by the way exactly how much money was committed to Fannie & Freddie--that figure seems absent from the Wall Street Journal and other publications.
Many folks seem to think this whole thing can be pinned on someone. In my opinion it can't be pinned on specific industries, markets, executives, citizens. Many have done things for years that led to this. I say let the market correct itself. That probably means a recession, and some other painful sorting out. But government's obsession with keeping things hunky dory means turning a recession that would normally last 1-2 years into an event that lasts a lot longer. I think there are a lot of foxes and hens in the chicken house and both sides are scaring the hell out of many folks across the country.
Warren Buffet, a very savvy investor in my opinion, spokeout in favor of the government plan and opened the betting with $5 billion, along with options to invest more. Andy Kessler, a former hedge fund trader and writer, suggests the taxpayers could yield between a $1--2 trillion return over time on $700 billion. Pretty good ROI. So why not let each one of us decide exactly how much of our money we want to bet on this and let the market play out. You know what--the ability to do just that already exists. I'm certainly fishing--I just don't have as much bait as Warren, and I just don't trust government telling us where to fish.
