The events of the past few days has my mind spinning. We are actually looking at the breaking point for the economy. Again. Wall Street is in trouble. Again. I have a few thoughts about this.
First, Wall Street is not the entire economy. The economy, where most of America lives and works has been struggling for at least the past 6 years. Times are and have been hard. Lots of people have lost their jobs and have not been able to find jobs at the same pay level. Lots of people are getting by piecing together two and three jobs.
Second, as I have already mentioned, this economic trouble is not new. So, I am left scratching my head when politicians act like this is the equivalent of a hurricane that needs emergency management kind of attention. This has been building for years. Major investment firms are failing because they got greedy – their CEOs and their boards of directors and their shareholders all got greedy and placed this quarter’s profits above long term sound actions. This is not unlike maxing out your credit card to buy the big screen TV so you can watch the Super Bowl in style only to realize two weeks later that you don’t have the money to pay the bills. The game was great but the bill paying sucks.
Third, what exactly do these politicians, who are now wringing their hands at the looming recession, think they are going to do in the emergency meetings? Are they going to undo the bad decisions? Or, are they going to write giant checks so that CEOs and boards of directors and shareholders don’t have to bear the real costs of making those bad decisions? When I can’t pay my bills, the repo man comes and takes back my stuff. It is pretty simple. And most of America lives with this reality every single day. We make hard choices. We balance the necessities and a few luxuries, although the luxuries are getting harder and harder to afford. We do without. We skimp and we stretch.
Now, let’s suppose that our politicians go ahead and bail out Wall Street. Let’s even suppose that this “fixes” the economy, at least for a little while. Who is helped, really? Is the family who has been struggling to pay their mortgage going to be helped? Likely not. Is the woman who has been working to make sure her kids are fed going to be helped? Likely not. How about the college student wondering how to pay this semester’s tuition? Likely not. The older couple who had been planning to retire next year? Likely not. The truth is that this $700,000,000,000 government bail out will only help one very small group and they have yet to even notice the hardships most of the country has been facing.
So, what do we, the average tax payers get for $700,000,000,000? We get more federal debt. We get higher taxes because someone ultimately will have to pay for this.
This is not a crisis and Wall Street did not just get hit by a financial tsunami. This is a chronic problem. The symptoms have been there for many years. Many people have been suffering under the burdens of a recession for many months. The government is not offering to help average Americans. The government is only offering to help the already very wealthy. And the average Americans once again must shoulder the increased burden so that the rich can continue to get richer at the expense of the growing number of poor.