Let’s hope this works.
I’m really conflicted on the bail-out scheme — asking taxpayers to patch up Wall Street’s greed is not a fair deal. The lack of oversight, and in particular the lack of regulations and controls that would prevent this from happening again, is a big problem. It means that we threw Wall Street a life raft, but we’re not doing anything to stop them from sinking it. It also strikes me as the worst aspects of socialism coupled with the worst aspects of capitalism — nationalization of private industry (along with all of its attendant inefficiencies), with taxpayers footing the bill to keep the private sector afloat.
But the plan that passed is far better than the original, and since I’m not coming up with better ideas, I’m trying not to be too critical. Of course, it’s worth noting that there are other ideas out there, and I — perhaps shockingly — agree with Larry Summers that a multi-pronged approach is the way to go. Brookings also has some interesting thoughts.
This plan is not a win for anyone, but something had to be done, and it had to be done quickly. I know there are those out there who think the government should have just let Wall Street clean up its own mess, and that’s a position that I’m theoretically sympathetic too — but not in the real world. The fact is that if Wall Street totally tanks, we’re screwed. Really, really screwed. And yes, I realize that Middle America has been getting screwed for a long time, but I’m talking more screwed. I’m talking screwed Great-Depression-style. There are levels of screwage, and the whole country is going to be taken to a whole new one if nothing is done.
But I sure don’t envy Congresspeople right now. These are uncharted waters, and this plan could be wildly successful or a massive failure; chances are it’ll be somewhere in between. But to have to make the call on something this important… I wouldn’t want to be in those shoes (which is why I’m extremely skeptical of anyone who thinks that this plan is 100% a great idea, or 100% a terrible one).
All we can do now is cross our fingers (and personally, I’m hoping that when Congress has more time to process and discuss — and when they’re not in crisis mode — they’ll patch up some of the holes in the plan, starting with regulations and oversight). And we can do our homework, because if you’re like me, you don’t know nearly as much about this stuff as you should. The Money Meltdown is a really good starting point to learn about what exactly is going on.