I Hate President Bush: But we NEED his ‘bailout plan’

As much as I dislike President Bush & Company, and despise the decisions he has made and the steps taken during his time in office – The one thing that I have to acknowledge is that his attempts to rescue the economy were the right thing to do. I would go even so far as to say that perhaps this was the ONLY right thing he had been trying to do and the American’s need to support his rescue efforts whole heartedly.


We currently live in a world which has been shaped by Capitalism and the present version in place means that if one significant part of the system comes to a stop, then the rest of it collapses around it. People have been warning us of the inherent evils of capitalism for decades but no one listened – and why would they? The idea that the big banks and the monetary system will go belly up was unthinkable. The unthinkable is now here...


So how does this affect you and I??? To put it in a nutshell:


• The capital provided by the banks is the heart of the current version of capitalism in place globally. If the banks do not have the liquidity (cash) to hand out, then the obvious thing is that they will not give out credit to businesses.

• Businesses are not some unsinkable entities, all successful businesses run because they have credit to support its endeavours. If there is no credit, there is very limited cash.

• Limited cash means that big businesses will put projects on ice, expansion plans will be halted, infrastructure programmes will be abandoned. This means that there will be limited opportunities for employment and small / medium businesses will struggle.

• Now the funny thing about reduced employment opportunities is that its effect is not felt immediately. The unemployment rate increases slowly say 0.1% one month, another 0.2% the next month and so on. By the end of the quarter – its gone up a bit. Another quarter later, its gone up significantly. So it usually takes 6 – 12 months for the reality to hit home. The first to go are contractors, then overtime is cut, penalties and benefits are cut, then slowly everyone goes.


People on ATS who are in my position of running a business will understand what I am saying. Businesses which were barely keeping their heads above water will now be plummeting into the red. There will be a lot of bankruptcies and people will struggle to keep their employees – and some will struggle to support their families.


On the last note, I should make it clear that I am in Australia. I operate a business in Australia. I am far far far away from the United States but I know I will struggle with my business and will have reduced ability to feed & cloth my family in the next coming year. I don’t want ATS readers to think that these are rants of a failed business owner who was no good at what they did. The truth of the matter is that I run a very successful company but I am acutely aware of the realities on the ground. To give you a comparison: Last year this time the my company was averaging $20 – 28k in profit per month – working from home only 3 days per week. This year, my clients are being cautious and the profit is down to $15k per month – and that’s after working fulltime and pouring my heart & soul into my work.


I am in a profession which sees first hand what is happening in factories and businesses, listens to the laments of CEO’s and Presidents of multinational companies over a beer on a Friday night but I am also just a phone call away from everyday people. I make money by helping men & women grow their career with global companies – so they too take me in their confidence and share their joys & woes with me over a BBQ or a coffee. Things have not been pretty recently. The effects were felt two months ago, but businesses were optimistic with the hope that things will improve in the United States and the bailout plan will ensure stability.

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Unfortunately with the rejection of the bailout plan this morning, the optimism will not be sustainable. I am expecting phone calls from the senior managers of large companies this week telling me of their concerns ‘on the quiet’. The sad thing is that this is not a ‘dot com’ bust this is a scenario which will at the very least see American citizens give up the lifestyles they have become accustomed to. Pensions will be wiped out – or at least be drastically reduced, Savings will disappear, Jobs will be lost. I will personally not be surprised if the 1920’s Depression will be made to look insignificant in comparison to the global consequences of the current crises. America needs to provide some sort of rescue plan.


The bottom line is that we need Capital. The funds need to get to the banking system in order to ensure the stability in the markets. This rescue plan was supposed to be an infusion of cash. We were told time and time again by the current government that the markets will fall into an abyss without it. We in business took solace in the fact that American will not let their economy collapse. That hope has been taken away and the stock markets are in turmoil.


Unfortunately the stock market has a nasty way of affecting the rest of us. The first ones to feel the crippling distress will be those on low incomes who rely on credit to get by. Middle America won’t feel it for a little while, sure they will be inconvenienced because the banks won’t loan the money as readily but they will get by. But I am a 100% certain that it won’t take too long for the flow on effects to hit home with the loss of job security, paycuts, the loss of homes, the disappearance of savings – and eventually the flow on tidal wave of crippling financial distress.


As much as it pains to say it, I believe that President Bush is right and we need his bailout plan.


As an outsider, I am curious to know why there is so much resistance to this rescue plan? Is this due to the lack of support for this particular piece of legislation and its wording? Or is it a strict adherence to the principles of capitalism which has seen the country prosper into the powerhouse it is now.


I sincerely hope that if the resistance is because of the wording, then the citizens of the United States will encourage their politicians to rectify the issue immediately and continue with the much needed intervention. However, if the lack of support stems from the staunch adherence to the core principles of capitalism then I would implore you to be flexible in your ideology and introduce this element of socialism just this once in order to avert the choking effects that will be felt by ordinary American and in turn by the ordinary people worldwide.


[edit on 29-9-2008 by 04326]

www.denninger.net...



www.denninger.net...

reply to post by 04326



At last, a sane voice rises amongst all the chants of crucify Him, crucify Him!

i already got my WILL WORK FOR FOOD SIGN made and ready to go as i wait in bread lines lmao

We don't need THAT particular bailout plan. I agree that without action, there will be a depression, but there are many alternative steps that could be taken to rectify this situation other than rip $700 Billion out of the American people's wallets.

reply to post by 04326


I thought that free market capitalism rewards success and cleans out failure. What the bailouts will do is reward those, or at least cover for those, who have ruined the system and failed. The bailouts also cover for the government policies and organizations that have failed.

Does capitalism mean that failures should still run a failed system with failed policies?

I say clean it out now. It will hurt a lot less to let the failures, the failed people and the failed institutions, die now than having the failures continue to fail until they fail under their own weight and hurt like hell.

And for those that lose their businesses or jobs because of these failures, if that is not incentive to fix the system and go after the failures, I don't know what is.

So who is this guy Denninger in the inbedded youtube link. Seems to be a sharp fellow but he against the bailout in its current form.

I too own my own business, but I do not run it with a cadre of employees. It is just me and the wife and we tend to stay in the black. We don't charge anything on credit, so the "credit crunch" won't bother us.

Maybe, just maybe, if we would set our priorities a little better we wouldn't be in this mess. If you can't pay cash, don't buy. If it's something you really want, save up. If you own a business that relies on credit to make payroll, I'm sorry, but that is not good business sense (no insult intended).

I'm sorry but the government has no right to saddle who knows how many generations with never ending debt simply for the greed of a few unscrupulous gamblers.

reply to post by wutone


Exactly. What they are doing is NOT capitalistic. It is the opposite.

en.wikipedia.org...

Capitalism is the economic system in which the means of production are owned by private persons, and operated for profit[1] and where investments, distribution, income, production and pricing of goods and services are predominantly determined through the operation of a free market[2], rather than by central economic planning.

en.wikipedia.org...

A free market is a market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers. By definition, in a free market environment buyers and sellers do not coerce each other, in the sense that they obtain each other's property without the use of physical force, threat of physical force, or fraud, nor is the transfer coerced by a third party.[1] In the aggregate, the effect of these decisions en masse is described by the law of supply and demand. Free markets contrast sharply with controlled markets or regulated markets, in which governments directly or indirectly regulate prices or supplies, distorting (according to free market theory) market signals.

Portion put in bold by me.

Meddling by the powerful on behalf of the rich is why we are in this mess. More meddling by the powerful on behalf of the rich is not the solution. A correction is.

We need a plan that will work, this one Won't.

So long as Pauslon is at the helm the bill will for lack of a better term suck.

I can't for the life of me determine why you think this BILL will actually get to the fundamentals of the problem. THE financial system is DELEVERAGING and this deleveraging will not be stopped. The only thing is WHO gets thrown a life vest as the system goes thru a very painful transition. You obviously have not learned that paulson is a liar and a scum bag or that the establishment /wall street party is putting the plan together and it is a plan for life vests not for steering away from the iceberg. And you (americans) are not getting the life vests. The iceberg has been hit, do yourself a favor and go to RGE monitor and click on the link that shows the two authors who put together the action of 30 plus country who have been in financial crises's and what the country did (where the plan worked) to get at the systematic problems. This Bill (even in it's revised form is INEFFECTIVE and a Handout to paulson's insiders.

NO!

We don't need HIS bailout plan. We need a fiscally responsible Bill written by Economists who will fix this mess, not one written by and for Bankers and Wall Street.

There are ways to solve the problems, they have been presented all over this forum in various threads.

Bush's bailout is treasonous and unconstitutional and the most it will accomplish financially is a short term stick save. It will banckrupt our future to 3 generations, change the face of the US forever and set a precedent for ignoring our Constitution.

If the way the Senate handled it (attaching it to the back of an entirely unrelated Bill to get it to pass) doesn't give you a clue that something is wrong here, I don't know what else to say except the biggest slap in the face of all.

It has become clear the constituents of our government have spoken and said a clear no, and they all know it. For any of them to be voting yes on this is a clear diss to those of us who put them there.

As unfortunate as it is, the world's economy is based on buying things for which we have no reasonable expectation to pay . . . credit is a house of cards that only self-perpetuates.

The more you buy on credit, the worse it gets as the ever growing burden of interest payments leaves you with nothing left to cover the basics.

That is what's happening now. It's an economic shell game with the sleight of hand moving so fast that nobody can figure out what 'shell' the pea is under.

Sad thing is that with these 'plans', our governments are working in concert with those spinning the shells to make sure we never find that pea . . . elected officials stand at the sidelines dangling tax breaks, freed up credit and economic salvation to keep us willingly guessing where that pea went.

As unfortunate as it sounds, the markets, the economy and its people need to correct the problem by stopping the lunacy . . . saying enough is enough . . . living within their means . . . everyone . . . from the top down . . . as this 'plan' only masks the reality that collectively as a country (and pretty much world wide) we've been living way beyond our means.

Unfortunately the piper has to be paid, and the only legal tender in this case is blood, sweat and tears.