This bailout bill was just too much to swallow, and we're glad to see that Rehberg didn't swallow it.
Yes, we have heard all of the arguments about how the economy will go into meltdown because of its failure -- isn't that called an "adjustment?"
It is true that many of the same people who are cheering on the destruction of the greedy fatcats on Wall Street might later be wishing that something had been done if they see that the rot has extended to their own apple-barrel. But what seems to be the case in our conversations with ordinary non-political, non-financier types is that they are resigned to a very bad spell in the economy no matter what is done.
The question is whether we are heading into bad times with Wall Street multi-millionaires federally insulated from much of the pain. Amazingly enough, people would seem to prefer that the greedy types on Wall Street start jumping out of windows. We don't like the idea of suicide -- we would recommend that those who have lost their gazillions put on sackcloth and ashes and head down to Washington to start fingering the Congressmen and bureaucrats who were complicit in this mess. We suspect they will, and it can't happen soon enough.
Call it Schadenfreude, call it what you will. But you don't have 228 Democrats and Republicans voting against a bill that has widely been billed as vital for our nation's financial health unless their phones are ringing off the hook by angry ordinary taxpayers who vote -- and the only thing that Congressmen fear more than bad relations with their campaign contributors is getting voted out of office.
3 comments:
I'm the sort of guy who might normally sympathesize with Rehberg's positions, but my retirement fund and some other family funds took a huge hit today after the bill was voted down.
So my question is: what is Rehberg's better idea? Is it just to let the market's sort things out? Are we going to be told to watch a quarter or more of our retirement savings go down the drain just to satisfy the principle of adjustment?
You are writing, MH, as though this will be painful just for Wall Street fat cats. But there could be a big backlash too when average folks realize what a hit their retirement funds are taking. I don't know the percentage of Americans with retirement savings, but it has to be quite large.
So what are you recommending that Rehberg tell them? Take the hit like a real man, or woman? Stop whining?
As i said earlier, I generally come down on Rehberg's side of things, but when I see my retirement fund take such a hit, I'm tempted to call his office and say: You are supposed to be solving problems, not creating them, for your constituents.
You know, I overreacted last night in writing about this issue, after seeing the huge hit my retirement accounts took yesterday.
I can't remember what I wrote exactly, but I took issue with the idea that Rehberg deserved a big pat on the back. My concern, admittedly with little research, was that the opponents of the plan seemed to just be in opposition to the bill, without any plan to fix the problem. We still don't know if they have a plausible plan to fix the problem, but they say they are working on one.
On reflection, it does seem the House Republicans have done some valuable work in slowing the process to make sure some reckless things weren't done impulsively.
Frankly, to a lay person, it is impossible to know what is the right course of action. Especially when they start talking about Libor rates, mark to market (?) rules, and so on.
Some of my reaction was to the notion that it is good to see Wall Street fatcats getting their comeuppance. I don't have a problem with that if it could be limited to those guys, but of course inevitably others would be hurt, millions of innocent small investors, main street business guys and gals, and so on.
Sorry your first post didn't get posted earlier.
I feel your pain -- my own retirement account took quite a hit, too. My retirement horizon is far enough away that I can afford ride it out, though, unless this is a dip of unprecedented length (which it could be.)
I think that this event will remind ordinary investors of their retirement horizons, and will remind them to do what good financial advisers have always said: the closer you get to retirement, the more needs to come out of stocks and the more needs to go into cash-type instruments.
I have no idea what your situation is, but I was talking to someone the other day who was in his late 60's, is no longer working, and who is taking a huge hit in the markets. He clearly didn't have money to burn, so I asked him why he had so much of his retirement money in mutual funds made up of stocks, and he replied: "I was making so much money, and was afraid the market would keep going up and I'd miss out. When it started dropping, I put off selling in hopes that it would go back up."
He was clearly sophisticated enough that he was able to articulate that even as he was doing this, he knew the right thing to do was to sell his stocks (taking good profits, but just not as big) and move into bonds and cash.
That isn't an unusual story. In his case, he made all of his own investment decisions, and had no one to blame but himself -- and wasn't whining, I might add. But I suspect that a fair number of investment advisers and mutual fund managers are going to be open to lawsuits for willfully misleading less sophisticated clients or for putting risky assets into what was were billed as conservative funds.
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