Fed Up With Bailouts

Bear Stearns ($30,000,000,000), Fannie Mae & Freddie Mac ($200,000,000,000), AIG ($85,000,000,000) - and now, $700,000,000,000 to bail out the U.S. financial markets. Where does it end?

"This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation." Henry Paulson, Treasury Secretary.

Although it might be easy to assume Mr. Paulson made this statement Tuesday morning during his appearance concerning the $700,000,000,000 bailout at the Senate Banking Committee hearing, he didn't. He made this statement on September 7 after the Feds brought Fannie Mae & Freddie Mac under their wing and placed them into conservatorship.

Ben Bernanke, Federal Reserve Chairman, and Paulson continue to use the housing market (crisis) as the reason for the decline in Wall Street. Ultimately it was the unregulated, bad business decision-making on Wall Street which caused this failure in our financial markets. $700,000,000 is throwing bad money after bad business. A relatively small group of people and businesses speculated in financial markets with borrowed money, taking extreme risks for a very wealthy return. Unregulated, they gambled and bargained in "credit-swaps" - a seemingly undefinable term. They made big money.

Then their gambling caught up with them and the bottom fell out. Inflated markets and housing prices will always, at some point, correct themselves. As this correction in markets and pricing continues, Wall Street has been left with their proverbial "fanny" hanging out in the wind. Now the American people are being asked, once again, to bailout their unregulated speculation and bad business decisions. The average American taxpayer can ill-afford to continually bailout financial markets and institutions. We need many things - healthcare, affordable education and infrastructure. We do not need to bail out those who have - despite many warnings - continued to make bad financial decisions.

Tuesday, during the Senate Banking Committee hearing on the $700,000,000,000 bailout of the financial markets, Senator Richard Shelby (R-Alabama) stated the previous attempts -Bear Stearns, Fannie Mae, Freddie Mac, AIG - show limitations in the ability to fix the financial markets.

"You can't assure us this will work because you thought the other plans would work," Shelby said.

Senator Elizabeth Dole, (R-North Carolina) railed against the bailout. "I have very strong concerns that this 'rescue' proposal will unfairly hold taxpayers responsible for the costly and reckless decisions of investment bankers on Wall Street. I, like the North Carolinians I am hearing from, am very skeptical of this proposal and frankly, I’m extremely frustrated that we find ourselves in this position."

Senator Jim Bunning (R-Kentucky) said he was against the proposal.
"It will not help struggling homeowners pay their mortgages. It will not bring a halt to the slide in home prices. This massive bailout is not a solution. It's financial socialism and it's un-American," stated Bunning.

Finances, whether a family budget, small business, Main Street bank, or Wall Street financial institution, must run on sound, reasonable, prudent financial principles. The concept is pretty basic, you cannot afford to spend or borrow more than you make or could afford to pay back. Speculation on Wall Street has become casino-like. Making a decision to borrow $700,000,000,000 to bail out our markets is only making another bad financial decision the likes of which caused the financial crisis Wall Street is now experiencing. The financial markets and housing markets will evenutally correct themselves and our $700,000,000,000 will be lost in this gamble.