Wednesday, September 24, 2008

Observing the Financial Mess

So far this financial mess has not effected me all that deeply. I'm a new home owner but had good credit. I have a strong job situation (at least for now I'm still in the honeymoon stage). Our family debt is small -- besides the house, we have 2 cars we're paying on. We have assets in the bank to draw on if necessary. So, all in all, we should be able to ride this storm out.

But I recognize that there is great anxiety out there. People are losing jobs and homes. We hear dire warnings of what might happen if the government doesn't intervene, but we also hear voices suggesting that this would saddle the American taxpayer with an unpayable debt (not that this has stopped anyone in recent years).

What is interesting is that the current bailout plan satisfies no one. You have Senator Jim Bunning calling it unAmerican, others calling it socialism (of course for some any government is socialism), others calling for more regulation and oversight. The reality is that something will pass and it will likely be a hybrid. In other words, Treasury will get its money, but Congress will attach stipulations like congressional oversight and maybe some relief for homeowners. It seems that both Obama and McCain are agreed that executives can't walk away with golden parachutes or retain unregulated salaries.

The biggest danger here is that we act in fear and create a monster worse than the one we face. Chris Dodd says he understands we must do something quick, but he wants to make sure we do this right. The one things I can say is that Congress won't be going home Friday to campaign. And whatever happens will require that the Bush Administration give the Democrats some of what they want because the Republicans seem to want to let the "markets" work this out.

Here is, I suppose, that 3 o'clock call! But neither McCain nor Obama are in a position to do anything substantial!

1 comment:

Anonymous said...

BRILLIANT POST!! DEAD ON!!
Sadly, politicians are of no help on either side. McCain and Obama feel like two surgeons arguing over who hurt the patient while the patient bleeds out on the table. The congress seems to see a big ole goodie bag of money. I am sort of the camp to do nothing, but I am careful because it WILL mean pain to many people who can't borrow any more money.

You are wise in your financial dealings and you should be fine. People turned a house, which is simply a box we sleep in and keep our stuff, into some great investment.

Jesus was the greatest investor of all time, storing his wealth in heaven, his comments on real estate - "the son of man has no place to lay his head". Ok.. so its a little weak, but maybe its helpful