Itâ€™s been 19 days since the Federal Housing Finance Agency became conservators of GSEâ€™s Fannie Mae and Freddie Mac; Eleven days since Bank of America purchased Merrill Lynch for the â€œbargainâ€ price of $50 million dollars and holding company Lehman Brothers had to file for bankruptcy; Ten days since the Federal Reserve spent $85 billion to rescue insurance corporation American International Group; Less than 24 hours since the FDIC seized bank Washington Mutual Inc., and sold its assets to JPMorgan Chase for $1.9bn; and nine days since the U.S. administration first proposed a Wall Street bailout of nearly $700bn.
Los Angeles Times Michael A. Hiltzik has called this month a â€œbailout binge.â€ Non-Americans, who will also be affected by what the American administration decides, have also blogged their thoughts.
Mexican blogger Ricardo Valenzuela writes in Intermex Free Market, that Americans and others should support the bailout.
â€œSAVING the world is a thankless task. The only thing beyond dispute in the $700 billion plan of Hank Paulson, the treasury secretary, and Ben Bernanke, chairman of the Federal Reserve, to stem the financial crisis is that everyone can find something in it to dislike. The left accuses it of ripping off taxpayers to save Wall Street, the right damns it as socialism; economists disparage its technicalities, political scientists its sweeping powers. The administration gave ground to Congress, George Bush delivered a televised appeal and Barack Obama and John McCain suspended the presidential campaign. Even so, as The Economist went to press, the differences remained. There was a chance that Congress would say no.
Spending a sum of money that could buy you a war in Iraq should not come easily; and the notion of any bail-out is deeply troubling to any self-respecting capitalist. Against that stand two overriding arguments. First this is a plan that could work (see article). And, second, the potential costs of producing nothing, or too little too slowly, include a financial collapse and a deep recession spilling across the world: those far outweigh any plausible estimate of the bail-outâ€™s cost.â€
Another Mexican blogger Baron Vitelius of Estera writes in Brainiac Conspiracy, that the bailout is necessary. He also writes that McCain and other Republicans rejecting the proposal will further devastate the economy.
â€œAmericans are pissed off about bailing out Wall Street, but Americans—heavily mortgaged working-class Americans in particular—also crave stability and security in times of turmoil. They want to know that their jobs will still be waiting for them tomorrow, that their company health insurance will still carry them until they get their kid's braces paid off in three months, that they won't be arbitarily foreclosed on by some lender that declared insolvency this morning. What happens if McCain actually convinces his comrades to scotch the bailout compromise, and the Dow dumps 500 points the next day in response? And another 400 the day after that? Will His Maverickyness still look like a man of high principle, or an arsonist in a fireworks factory?â€
On the flip side, Liza from Puerto Rico agrees with Ron Paul and his thoughts on the bailout. She writes in Culture Kitchen that the bailout will not work in the long-term.
â€œRon Paul's assessment of the current crisis is very simple : The government wants to fix prices; to keep the prices of housing, of securities and of the banks at their pre-crisis levels. This obviously goes against the “natural” flow of the markets and it's what historically brought us the much invoked “Great Depression”. You can keep prices artificially for so long.
In other words, this bail out will accelerate us into another Great Depression. The bail out is not going to get us out of it.â€
Finally, Michael van der Galien writes in PoliGazette that the proposal and all aspects surrounding it, are all still political.
â€œFirst there are Republican Congressmen who refuse to support the bailout because they fear it may result in them losing reelection. Their constituents have called them en masse, to inform them that they if they support the bailout, they cannot count on their votes.
Second there are the Democratic leaders who, together with some Republicans who support the plan, should be able to get the plan – or a compromise on it – passed. They refuse to do so, however, because they want to make this â€˜Bushâ€™s bill,â€™ and thus a Republican bill.
Then there are outside groups who say that:
1. Itâ€™s just a gigantic plot to make the government even bigger and more powerful than it already is
2. Itâ€™s plot to help the rich, not â€˜Main Streetâ€™
Meanwhile, the ones who support the bill are freaking out, believing that the economy will collapse if something is not done immediately. These individuals include George W. Bush and Hank Paulson.
And virtually every single expert in the world.
Great to see that U.S. politicians are able to put politics aside for the greater good.â€