I’m surprised at the failure of the bailout – from what I heard over the weekend, it was widely expected to pass.
Frankly, I don’t know what to think about the bailout. On the one hand, privatizing profits but socializing losses is a recipe for unbridled and excessive risk-taking. One can say that Wall Street got itself in trouble, and it shouldn’t need taxpayers for a bailout. On the other hand, it’s never a black-and-white issue of Wall Street vs. Main Street, where when the former loses the latter wins. Wall Street’s problems continue to flood Main Street. Frozen credit markets affect everyone – the college student looking for a loan, the newlyweds seeking a mortgage, small business owner trying to expand, and the applicant searching for jobs.
$700 billion is a huge amount, but what would a deep and prolonged recession cost the economy? The bailout is hastily put-together, but is it TOO hasty? The difficulty is that no one really knows the answer.
I don’t know what’s going to happen, but I AM looking for some sort of action from Congress. Even though this vote on bailout failed, I think there will be another round of voting / revisions to the measure.
In the meantime, I’m contributing to the problem by pulling tighter my purse-strings.