Stop Playing Politics With Our Futures

For years we have been told that the stock market and the housing market are overheated. The countries suffering now are those who gained the most in the last 10 years, in a reckless environment without any legislative control. There is no crisis in (most of) the rest of Europe and prices have to be redressed. Tighten your belt, look for bargains.

Why should the taxpayer be supporting the market when it fails? That is as bad as windfall tax or limiting the market when it expands. Banks are meant to be cautious investors, and the risk lies with them.

LOJO

We're just as much to blame. We elect the idiots in office. We pay the idiots in the financial services sector and WE borrow too much money and live beyond our means. We've all known for years that we cannot continue to live off cheap credit. There's no such thing as a free lunch...an old adage, but true nonetheless.

For the health of world economies we need a recession.. it is locked in place and unavoidable. This bill will simply allow the US administration to treat a particular sector with preference to all others and to launder money at the tax payer's expense, propping up asset and stock prices in this way will lead to an inflationary depression. Remember the Weimar republic?

The fairest solution is precisely to let the market do its work. I can only assume that your article is written off the back of emotion as stirred up by the rest of the panicked press, and as a result of GWB's blackmail to pass the bill or else take down people's pension funds, and you also have a vested interest in your HBOS position so therefore talking your book ;)

Our money system and globalisation are to blame, a global fiat money system using the dollar as a world currency and Keynesian economics let by a criminal syndicate is simply not working and is not sustainable.
We should let it die a death and bring back sound money!

The trouble with politicians, both sides of the Atlantic, is that they are today almost exclusively "career" politicians who have never done a proper job in their lives. The world would be enormously imporoved if no-one was allowed to be elected, who had not at least twenty years real-world experience (i.e. of supporting himself or herself by any means other than working for a political party).

We used to have many un-whippable MPS who went into politics at around 60 for one or two terms, after a lifetime of work, with the intention of serving their constituents. Sadly, the parties have now made sure that nobody gets selected as a candidate, who isn't pliant lobby-fodder, holding few principles other than those he's told to espouse by his party's leadership.

The markets are working well, despite government interference. Realistic prices are being put on overvalued assets. This is about solvency and if banks are insolvent, because they are overleveraged, they should go bankrupt like any business. The world won't end and the global economy will recover quicker.

Any self-respecting Thatcherite has known for the past six years that Domesday was inevitably coming. Now its here thank God there are still enough US politicians who have the sense to avoid the oddly socialist reactions of a Republican president. What a wobbler! Don't mess with the Market.

The problem maybe, JT64, that the people who are demanding that this Bill ISN'T passed possibly don't collectively realise or understand the implications of not doing something. They may just think it's another attempt by powerful politicians to shore up the lifestyles and errors of powerful bankers.

This Bill failed at the negotiating table, not in the chamber.

The real problem with the Bill is the lack of quid pro quo. Well, that and the fact that unlimited, anaccountable power in the hands of Hank Paulson was the only thing that scared the senators more than financial meltdown.

"stop governing for votes and start governing for the people" ??? This seems to imply that there is a "right answer" which the politicians should know and implement even if the people are saying they should do something different. Actually I think that is often the case - the electorate doesn't know how to drive a modern economy and what it asks for and what it needs are different things.

How do we provide legislators and the executive with the lattitude to give the electorate what it needs rather than what it asks for (and over timescales long enough for systemic consequences to work themselves out) while maintaining anything resembling democracy?

In a democracy the electorate will tend to get what it deserves, even if that is not what it wants or needs. If the electorate wants something better, it should (i) study economics and history (ii) get real (iii) be more careful what it asks for and (iv) be more choosy who has its permission to represent its interests (e.g. not newspapers, for God's sake). Changing the leadership on its own will not alter the dynamic properties of the system over the longer term.

So, US Congress, stop governing for votes and start governing for the people – it’s what you were elected to do, after all.

Except that the people I've seen on US TV are telling their representatives they don't want this deal to bail out the banks. It appears that congress may well be doing what it should do all the time - listening to the people not telling the people what to do.

It's called DEMOCRACY. The elected representatives are elected to represent the electorate, not to ignore them once elected.

Now don't get me wrong - I too think the deal is absolutely necessary and we need it ASAP and I was shocked at the vote result last night but if the average voter doesn't want it then that's democracy and those who do want the deal just have to take it on the nose.

Jon.

How much of this crisis is the bankers trying to get there hands on taxpayer's money and how much is real. The London Stockmarket has not collapsed, why do you think the Dow jones will. Safeguarding depositers money, within limits is necessary but keeping the bankers in there multi-million pounds salaries is not.

The author appears to be following what is known as Politicians' Logic - which is ironic, since in this case it's politicians that have actually avoided it. It goes like this:

"Something must be done. This is something, therefore we must do it."

But doing nothing is better than doing the wrong thing. The author may want to ask himself if there could be _any_ bailout proposal that he would be opposed to. $7 trillion? $70 trillion? "It needs to be stabilised, and fast", right??

Paulson took a typical Goldman Sachs attitude to the problem of looking for the biggest pot of money, Uncle Sam, and throwing it at the problem. There seems to have been little detail and he was perceived as looking after his pals on Wall St. I don't think it is a surprise it was rejected, as will others be if they propose something similar.
Can you imagine Westminster giving Darling similar powers?

My fear is about what is done, not what is not done. The people in power seem to be bent on repeating the mistakes that got us into this mess. The media have overused and misused the term "credit crunch". We are encouraged to see the credit crunch as the cause of our problems, when in fact it is our problems that have caused the credit crunch. Oil and food prices haven't risen because of the credit crunch but because of demand. our best steps would be to take action against those aspects which led to the crunch. For me it's irresponsible lending, fat cat bonuses, and too much buy to let. other than that just let the economy put itself right, and make the necessary adjustments (such as house price falls). And if the stock markets are a problem then close them down for a couple of months, and send the staff home (without pay)!
OK the last remark is a bit flippant, but I am a bit annoyed that we have politicians who would be wary about making some of these tough moves, and then propose even more extravagant measures (with our money).
A last comment: people are talking about the risk to any bank savings above £35000. Forgetting about business and other non-personal accounts, if you have that much money you are doing ok and should perhaps put things in a little perspective.

The above postings show that the central issues here are not understood and are being confused by a lot of moralistic irrelevance. When the archbishops (whose salaries are paid for in part by shorting banks) start offering opinions I know the asylum has been taken over by the mad.

The central fact is that the existence of dodgy debt on the banks lending books has created fear to the extent that the banks no longer lend to each other. When that happens the whole system locks up, firms go bankrupt and the ordinary punter loses his job. Serious recession follows. Fixing that is the number one imperative. All else is just so much bull manure.

The only way to resolve that deadlock is to remove the debt from their balance sheets and increase liquidity of capital. That is what Paulsen wants to do and it isn't a new idea. It is what has happened in similar situations before.

Unfortunately the US cabinet is full of arrogant dictators who tried to do this on unacceptable terms that left them totally unaccountable. That is unacceptable. 2/3 of their own party then voted against the president in a mistaken belief that doing so would save their own electoral skins. that is immature behaviour.

At the same time it was noticed that some senior bankers were being removed with their bonuses intact. That too caused anger and frustration. Predictable but unhelpful.If this in't done the people who will suffer will not be any of those who are involved. It will be everyone else who will have to bear a depression much longer then it needs to be.

Remember too this huge some of money does not disappear. The loans were made against assets that have some value, and last time the US governement made a net profit out of the failure of the Savings and Loans collapse. Most of it, and the Northern Rock and B&B will come back in time.
What is needed here is sanity and cool heads not a lot of emotion,panic or populist ignorance. Unfortunately that is what currently there is a huge surplus of.

In fact, I don't claim to know what would happen if this Bill is passed or not...

Maybe it's time for another Motley Fool guidebook (from both UK & US versions of the Fool), such as.... "The Motley Fool guide to finances for politicians" (and hand a few copies around) - if the Fool's usually excellant skills at teaching financial knowledge to those who find it mind boggling don't sort 'em out, nothing will.