Bailout denied… now things are getting scary- or scarier…

30 Sep

I’ve been searching and searching for public opinion on the Bailout rejection- and I’m just not finding it. Why is this?  Reading articles written by reporters with political agendas is somewhat informative if you can see through their biased leanings… but I find out more about what’s really going on from political blogs, and responses to those blogs.  It’s kind of like a warped easter egg hunt… I’ll search for a topic, and find the most popular conservative blog- then I’ll scroll through the reponses to it and Poof!  There are all the informed and educated folks responding to crappy conservative rhetoric… and then I take that info and look it up to see if it’s actually fact.  It’s a ridiculous process… but it’s the one I’ve found that works out the best if I’m looking for real information.

But I’ve had a really hard time finding any commentary about the $700 Billion Bailout that’s worth a damn.  Why is this?  Is it that people just don’t have enough info to form an opinion (which never really stopped anyone from opening their mouths previously), or is it just that it’s more fun to shit talk the candidates then talk about the possible destruction of our economy?

Yes… it’s super fun to shit-talk the candidates…. but this situation that our befuddled Congress is trying to sort out is just as important as the election- and really really scary.  Why are people not discussing it?  Or sharing information?  Or just plain freaking out?  Because it’s TOTALLY freak-out worthy.

Yesterday, after the Wallstreet Bailout was denied, the stock market dropped almost 800 points (I think the exact number was 777, but please correct me if I’m wrong).  That is massive.  Why was it denied?  Because the members of Congress are too afraid of pissing off the public during election time to make a solid stand on anything.  This is BULLSHIT and is keeping anything from getting accomplished.

From what I’ve read, the general public was opposed to the Wallstreet Bailout.  And I can totally understand the frustrations of the public… people have lost their homes, their jobs, their possessions and financial stability.  The state of our nation is in such chaos because of major financial instution’s greed and horrifying practices… so why should THEY get the bail out?  Why not give it to the people who lost their security?

From everything that I’ve looked into, this is why…. In order for individuals and small business to grow and regain stability- Wallstreet has to have it’s feet on solid ground.  Totally shitty, I know… but it’s just the way it is.  Individuals and small businesses RELY on banks, lenders, mortgage companies, etc to grow.  How is a family going to buy a house if the lenders don’t have the money to lend?  How is a buisness going to get started, continue growing, or even pay it’s employees or it’s bills if their lender doesn’t have any money (a common business practice is to use money from borrowed lines of credit or the like to pay employees with, and then it gets paid back throughout the month as money comes in from sales).  If there’s no money to distribute to employees, businesses, or individuals- things come to a halt.  People don’t get paid.  Then people stop spending. Then businesses don’t have sales.  So people don’t get paid.  Then people stop spending…. etc.  Ya see where I’m going here?  That’s just one of many scenarios going on right now that are putting our country in a downward spiral.

Because these financial institutions have no money because the market has shit the bed, they have no money to lend.  So right now they’re not taking any chances on ANYONE unless they have impeccable credit.  For example, let’s say you need to buy a new car.  Right now, your credit score needs to be in the ballpark of 720 in order to get a loan or to lease one.  720!!!!!! The average American’s credit score is much lower than that.  So what does that mean?  People can’t get new cars, and the automotive industry takes a dive, and MORE people lose jobs, can’t pay bills, and lose their homes.  That’s why no one is buying houses (no money, and their credit scores aren’t high enough to get loans OR you now need 15%-20% as a down payment, and with the average home costs being close to $200,000- I don’t have $40,000 laying around… do you?), people who’s homes are have been on the market for a year or more while they’re paying 2 mortgages are having to foreclose, and things keep going down down down.

I think the wording of the denied “Wallstreet Bailout” was what pissed people off and confused them.  When you’ve lost everything because of the horrible business practices of big business, the last thing you want to see is the government bailing them out.  I totally get that.  But there is no way that anyone can make a plan that will save everyone.  And it took years for us to get to this state of emergency- so it’s going to take some time to pull things back together.  But the first thing we have to do is get the financial lenders (the ones who DIDN’T subscribe to illegal business practices) back on their feet so that they can start getting money back out into the economy- and then people can have the option again to buy homes, business can make sure they can cover their payroll so employees get paid instead of getting laid off, and the economy’s wheels can get back into motion instead of being at the grinding halt they’re at right now.  BUT the way this money is dispersed has be done under a microscope and with massive amounts of legislation so that it actually gets to the right people.  Nothing open ended, realistic and solid timelines, and the people in charge of this being kept in check.  I’m not sure if that’s possible considering our congress is made up of crooks fueled solely by their own greed.

As much as I would like to say “Fuck big business!  Fuck the banks!!  Give the money back to the people”… it just isn’t realistic to give everyone back everything they lost, AND still find a way for the economy as a whole to get back on their feet.  I think this is the first time I’ve ever supported giving money to the banks.  It’s one of those “big picture” types of things.  And since our entire nation is built on these lending institutions (whether we like it or not), those institutions need to be made strong again in order for a trickle-down effect to start.  I deal with small businesses daily (boutiques, galleries, various people involved in clothing production and sales, etc)- and small business is being destroyed because of the cancerous state of financial lenders.  Earlier in the year, all my small business banking loans got cut in half because of the banking decline (seriously, there was no other reason except that my credit score wasn’t over 700, so I no longer qualified for the amount I was previously qualified for, and they just took it back)- which means that I can’t make more products, which means my sales drop, which means I can’t pay my bills, which means I have to go back out and get another job (one with flexible hours so that I can be able to take care of my kid) AND run my company at the same time- but noone is hiring because everyone has had to downsize because noone else has any money.  If the lenders have stability, that stability is stretched out to the people.

That’s all I know from everything I’ve read and talked to people about.  But I would love to find out more.  I’m dying to hear other people’s ideas and possible solutions.  And if I’m wrong about some of this- please tell me!!  Because I’ve had little to go on except what the newspapers are saying- and they’re nothing more than propaganda for whoever’s agenda they support.

Feedback?  Anyone??


11 Responses to “Bailout denied… now things are getting scary- or scarier…”

  1. chelsea rae September 30, 2008 at 1:33 pm #

    Try to keep in perspective:
    While yes, the front page of the LJW was black & scary, beneath the scary [misleading] bars comparing the point drop of yesterday to the point drop of 1928, & 1987, they do include in tiny fine print that yesterday was a drop of 7%. 1928 was 12%. 1987 was 22%.
    Lots of points, yes, but the DOW is millions of times bigger than it was at it’s inception. Overinflated, with imaginary, pretend money.

    Like monopoly money.
    Except worth less on the world market.

  2. Kristen Ferrell September 30, 2008 at 1:45 pm #

    True true true…. I just get freaked out when they’re reporting One Trillion dollars loss due to the point drop because the $700 billion bailout was denied. That seems utterly massive.
    But you’re right… play pretend money.

    How the fuck do they do that?
    Can we do that?
    Are we allowed to say “Here’s my imaginary bag of $200 Million dollars that I’d like to deposit into my checking account” ?
    I think that we’re entitled to a little bit of that.

  3. Kararararalyn September 30, 2008 at 7:41 pm #

    YARG. Every minute of every day, I/we’re thinking about the economy, from the amount that I flush the toilet to the amount that I feed my cat. UG. You have this amazing way of breaking things down .. and conveying them in a really easy to understand way. Back to cooking my rice and beans for dinner…

  4. daMama September 30, 2008 at 10:00 pm #

    What burns my butt is that Warren Buffet warned about this back in March 2003. Fooling around with fake/pretend/non existent money was going to come back and bite Wall Street and the banks in the proverbial @ss in a hard way. The general public would feel it in a much more intense way.

    Personally I’d prefer the nibble on the bum than the giant kick in the groin we are all getting now. Economist are really torn on this one. Some feel we really need the bailout or it will only get worse. Some feel we it doesn’t matter, its going to get a lot worse before it gets better either way. The 800 billion dollar question is do we want our pain quick and get it over with or do we want our pain slowly and more deeply?

    I’d rather the quick rip the band aid off now method over the slow painful ripping of one hair from its roots at a time method.

    I’ve no idea who is right or wrong here, I’m hopping mad. Regardless of which way they vote on the bail out, the U.S. dollar is going to tank on the world stage and that will be a killer for my exports to the U.S. Was working on a very nice government contract and now I am not so sure I can trust their check would not bounce like a rubber ball.

  5. daMama September 30, 2008 at 10:02 pm #

    forgot to include that link to the warren buffet story on the BBC.

    it is an interesting read.

    if you are interested in political forums, there is a good one called dozens of topics you might find interesting… or not.

  6. Lex October 1, 2008 at 6:06 am #

    I just got my out of pocket so far statement from my medical insurance co. and in just 08 up till now we have paid $31,742. That’s out of pocket, what the insurance didn’t cover. Not including the airfare and hospital stay when I went to specialists in Florida, and I still have $3k more to try and pay. Now this happens. All this commercial building going on in my area has always sickened me but now it’s even worse knowing that there are scant businesses able to keep stores running.

    Don’t get sick. This is pure agony having this crisis in the markets after having already paid so much money and lost any form of decent credit from the bills I was so late on when I was going through the worst of the trigeminal neuralgia. On the bright side, we never thought we had that much money to budget out, so if I can stay well maybe we can actually afford a new car after all! Next year of course, and if we can get the loan.

  7. Kristen Ferrell October 1, 2008 at 8:19 am #

    FINALLY this article was on the front page of Yahoo news this morning:

    daMama- Thank you for that link!! it drives me NUTS that this issue had been thrown into the “sleeper issue” pile for too long, and they have only given it attention because the emergency sirens are flashing. It’s the same thing they’re doing with social security and health care (as well as tons of other vitally important topics)… and it’s bullshit. They don’t try to solve a problem until it’s so bad that it’s unsolvable- and at that point there’s no possible solution that will help everyone.

    But what’s scary is that the problem is so overwhelming that financial analysts and advisers can’t even agree on what should be done. And the people who are in charge of putting proposals and plans together can’t be trusted to keep the American public’s best interest a priority over their own agenda.

    If they ever DO agree on a bailout type plan, the money will come from borrowed funds and taxes. So how are they going to keep taxes down if it takes longer than anticipated for the plan to really make a difference. And with borrowed funds- how much more in debt can we afford to be? How many more public programs are going to have to endure funding cuts because of this?
    BUT not doing anything isn’t an option. It’s going to get worse before it gets better- but there needs to be a plan in action to bring us back up from “worse”, instead of just “riding it out”. We’ve been just “riding it out” for a while now, and it’s all coming unraveled because of inaction.
    The entire planet is watching us with this… because everyone else is either heavily invested in us and our downfall could take them down too, OR they’re watching for our downfall so they can jump in and kick the wounds.

    There’s no “perfect plan”… and with everything pertaining to our government, we just have to go with the lesser of all evils.

  8. whitney October 1, 2008 at 6:06 pm #

    kristen… for real, if it weren’t for all your “ranting” and “ravings” on your blogs, i wouldnt fully understand what’s going on in the world….. it’s pretty sad, but i have a hard time following along cause i dont fully undetstand half the shit i hear. when i read your blogs it helps make a lot more sense! (even if it’s not completely accurate 😉 ) it’s at least helping me undestand about 99% more.
    you should start your own kids show or something and help kids and stupid people like me understand better. i’d totally wake up at 7am to watch it and hang out in my pj’s all day eating cereal.

  9. myshinyhell October 2, 2008 at 3:40 am #

    Great informative writing, Kristen. I’ve been confused on this one and appreciate your explanations and clarification. Makes a lot more sense to me now, and as usual, I agree with you. Why? Because I think you’re incredibly smart and have the most raging case of common sense ever. 🙂


  10. myshinyhell October 2, 2008 at 3:42 am #

    Oh, hey! I’m logged in with a different email, I see. Well it’s just me, Tawni. myshinyhell = Tawni. Weeee!

  11. Kristen Ferrell October 3, 2008 at 12:16 pm #

    The way the bill was proposed and explained made it nearly impossible for anyone without a Socioeconomic degree to understand. Because what it looked like to everyone was that the government was just going to hand over money to rich people while the rest of the population kept failing. But now that they’ve thrown in some happy add-on’s like tax breaks & what not, and it was signed today, all we can do is cross our fingers and hope some good comes from it.
    ANYTHING has got to be better than what they have been doing for the past 18 months- which was absolutely NOTHING!!!

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