September 23, 2008

Passing the Buck

Years from now, maybe some historian will be able to look back and figure out exactly why we let our economy erode into such an awful mess, and why exactly when it hit the worst point (if indeed where we're at is the worst point, which I doubt), the people who were most responsible weren't held accountable. Maybe we just haven't yet evolved to the level of intelligence and reason to figure that out, but I'm sure a more advanced version of Americans will solve it right away.

I know very little about the world of finance, so I won't have many words to spout off on this topic, but I almost feel compelled to based primarily on my ignorance. I know very little, and yet even I can understand that a horrible, awful fleece job is being pulled on the majority of Americans with this recent bailout plan for major U.S. financial institutions.

I understand that if nothing were done to keep these institutions afloat, there would be unfathomable crises for millions of people across the country. Imagine, if you can, an America where credit does not, and can not, exist. Imagine if the value of the dollar were to take an exponential plummet from its already dismal place in the world economy. In short, bad shit would happen.

This bailout, though, doesn't seem to be the way to address the situation. It will, in theory, buy out the distressed assets and dead-in-the-water mortgages held by these institutions. But it doesn't hold accountable the people who allowed this all to happen in the first place. These executives who pulled in record, multi-million dollar salaries and bonuses in recent years are essentially getting away scott-free. These institutions who kept collecting money based on poor assumptions that the housing market would just continue to rise in America, they're going to be taken care of, with the bill basically being passed on the the Amerian taxpayer, without any sort of assurance that something like this won't happen again.

I've had to hear a whole lot of opinions and analysis of this matter living here in New York, where Wall Street isn't just a catchall name for the world of American finance, but a physical place downtown, and the only people who seem to be given a doomsday scenario for the future are regular, lower- to middle-class Americans, already suffering through the housing slump and an economy headed straight for (if not already in) recession. This plan could reportedly end up costing taxpayers up to a TRILLION dollars, all to hand a blank check to the Treasury Department (unchecked, mind you, there are provisions in the plan to keep this out of the courts and not hold the Treasury Department responsible for anything, should further problems arise) in hopes that they can fix the situation, while not punishing the leaders of the institutions that got us here in the first place.

The whole thing gives me a headache. This is America? This is what we do when the people elected to protect our well-being lead us down the wrong path?

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