Wall Street reaction (WKRG News photo)
The $700 billion bail-out of Wall Street should die a natural death this week and for all good reasons. Wall Street doesn’t need $700 billion although they will whine like babies if they think there is milk and honey coming their way. The bail-out does nothing for the real victims – the millions of Americans who are losing their homes.
Life will go on in Wall Street without the bail out because they are in the business of money and money has no tears. It is greedy. Once Wall Street sorts out that the milk and honey isn’t coming, it will be on with business as usual.
America has one of the most efficient models of capitalism based on survival of the fittest and quick and clean bankruptcy. It knows how to handle a business idea gone badly: you kill it and let the losers start over. Their bankruptcy laws are well suited to letting go of losers. Enron was big talk but it’s just history now.
Let the Wall Street losers lick their wounds and die. Right now they are whining because the government is in an election year and vulnerable to all kinds of weak minded thinking. Bailing out rich bankers and investors is not a good idea. Even the presidential candidates are not immune to this kind of knee jerk thinking. Bah, let the loser businesses die and their principals will be back at the table in months or in jail if they are criminals.
The homeowners who got caught in those no equity, sub-prime mortgages are the real problem. They represent millions of votes of people who will lose the most important thing in our lives after the remote control – our homes. If Bush, Congress and the Senate don’t insulate homeowners from disaster, they will vote with their homeless feet. That won’t be pretty and there are plenty of smart elected officials who understand that.
On Monday, the market fell like a stone: we’re not getting the bail-out screamed Wall Street. On Tuesday it bounced right back as business as usual took over. Wall Street people are in the business of making money buying stocks cheap and selling them to you at higher prices.
Every 10 years or so, the truly rich wait for a chance to take their cash and buy your stocks at rock bottom prices. You are panicking over some imagined catastrophe and sell out. They hold the stocks for 3-5 years until they have made 50% or more and then sell them back to you at inflated prices. That cycle has been going on for decades.
Bail them out? Forget about it.
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