Plan B
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Like many people who took more than a few economics courses back when they were in college, I opposed the bailout. Of course most of the members of the house of representatives and the senate did not take much economics in college at all. In fact the congressman who represents my home town (Silvestre Reyes) didn't even earn a four-year college degree. He graduated from a 2 year junior college.
I didn’t oppose the $700 billion Wall Street bailout because it revolted me that the people who serve in congress were helping out the super-rich, while they were ignoring homeowners who were undergoing foreclosure or the 50 million people in America who don’t have health insurance. I think that speaks very poorly for the Senators and Congressmen, but that is not why I opposed to Wall Street Bailout.
I opposed it because like lots of people who actually know a little about economics and “the market” I was absolutely certain that this enormous $700- billion bailout would not work. It would just be a great deal of money flushed down the toilet.
Maybe I was wrong, but I don’t think so. Time will tell, and I don’t think we will have to wait very long to find out that this is just the latest dumb move of the George W. Bush administration. Don’t forget, this is the same president and the same congress who took us to war in the wrong country.
Now that the bill has passed and has been signed into law by the President, Treasury Secretary Paulson is the most powerful man in America. Certainly at the moment he is vastly more powerful than George W. Bush.
Anyone who thought that this would “solve the problem” either hasn’t been doing their homework or has been smoking those funny little yellow, hand-rolled cigarettes again. My forecast was that the $700 billion Wall Street bailout would very briefly give a small boost to the stock market. But that it wouldn’t do anything at all to solve the root problems in the economy or the credit markets.
The problem is that we have now shot our wad. We have no more dry powder.
Of course the federal government has the ability to just let the printing presses rip and start furiously printing dollars. Figuratively. In economic vocabulary it is called “expanding the money supply.” But the concept is just as real as running the printing presses at top speed day and night.
My forecast is that if you think that the U.S. Dollar was devalued before this, you ain’t seen nothin’ yet baby. We are in the very early phases of the beginning of this crisis.
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http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100303616.html?wpisrc=newsletter
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