1. Hold themselves accountable (by name… not House or Senate but by individual names) if this thing doesn’t work. I want to know who screwed up!
2. Agree to some punishment if their plan doesn’t do what they are promising it will do. Punishment and an agreement that they will resign their post… Immediately!

I want to see some accountability before I will agree to this approach.

Can I borrow some money? Oh, and if I can’t pay you back just take it from someone else who doesn’t owe you!

People deserve to be parted with their money and homes for taking that risk and losing. Banks deserve to fail and close for giving those loans in the first place.

A middle-class American who owns no stock and no homes has nothing to do with this situation.

Even if it DOES end up hurting the nation as a whole, those people who took those irresponsible risks are to blame and should be burdened, not those who were fiscally responsible.

The lack of personal liability when it comes to money is at an all time low, many of this nations problems could be solved if people would own up and pay for their OWN mistakes.

“The market actually works.”

“But let’s be clear about one thing: The root cause of all this is that the Federal Government urged—and then mandated—that bank loan portfolios included an increasing number of loans to politically favored groups, more or less irrespective of the loan recipient’s creditworthiness or ability to pay.”

I add the emphasis because I have yet to see one of the ideologues making this claim back up that part of it.

“Ownership warrants are death to capitalism
No way. No how. Once you open the door to government ownership of private firms, you can toss the free market right out the window.”

It’s not about the ideology, Doug? Tell us another one.

Several points.

First of all, not everyone agrees with the Bush Administration that failure to pass this bailout bill at this time will lead to disaster. There are plenty of economists I could name in addition to Casey Mulligan who have questioned the veracity of statements of impending doom by the likes of Paulson, Bernake, and Bush. As for Jim Cramer……well, I learned a long time ago not to take advice from hot heads and Cramer is a hot head. Back in March he was telling his viewers that Countrywide was a safe investment despite signals of impending doom. A week later, the company cratered and the stock was worthless.

Second, as Dale Franks points out in the second post I linked to, the only thing that this bailout is accomplishing is delaying a seemingly inevitable day of reckoning. We’ve been butting off the consequences of easy credit, a dollar with fictional value, and out of control government spending for decades now — this bill may buy us some more time, but it doesn’t mean the bill won’t come due. Why wait ?

Third, you concede that this bailout will hurt the dollar. Heck, if some of the stuff I’ve been reading this morning is right, it could end up crippling it to the point where the world finally looks to the Euro as it’s store of value. Even if that doesn’t happen, though, another dollar collapse will hurt the economy immensely.

Finally, this isn’t about protecting “pure” capitalism, it’s about facing up to reality which is the one thing this bailout bill is shielding everyone from.

First off, the Chicago economist you cite is incredibly short sighted because all he does is hope that other institutions will step in…

But, as long as the government does not get in the way, the marketplace will quickly react to provide the non-financial sector with financial services, even if the main players in that marketplace are no longer named Lehman, Merrill, or Goldman.

I’m sorry Doug, but the market isn’t quickly reacting to anything right now and for Casey to be so nonchalant about this reveals a certain academic blindness to the realities of the crisis we’re facing.

Also, he talks as if the collapse of the financial sector would only hurt jobs within the financial sector…not giving any credence to the dangers a massive credit crunch would create for the non-financial sector.

In other words, his numbers may be correct, but they don’t matter because his premise is WAY off.

Also, to this point…

Part of capitalism includes the risk of failure, and when people make financial decisions they ought to calculate those risks into their decision making process. When the government stands on the sideline and says that they’ll save you if you fail, it makes it a lot easier to take risks that harm not only yourself, but others as well.

Well sure, we all know how capitalism ought to work, but in this case we have a very special situation where a MASSIVE bubble has burst and the mechanisms of the free market have ground to a halt.

In short, this isn’t just about banks losing money…it’s about ALL of us losing money and, most importantly, jobs. Not being able to get loans will absolutely cripple our economy. That’s the moral hazard I’m worried about, not whether or not we stick steadfast to the “pure” tenets of capitalism.

Last…I understand that this will hurt the dollar. But I’d rather hurt the dollar at this point then risking losing millions of jobs.

In any event, good post and I appreciate the fact that you shared it…even though I agree with none of it. :-)