Saturday, October 4, 2008

America’s financial crisis and the bail out plan….

“Wall Street thinks that an average American is a “stupid””. The proof is all over the place, in every news paper , in every news channel, which could very well stand as a vindication to my claim that American government and Wall Street thinks an average American to be a stupid. “BAIL OUT PLAN” the way in which it has been camouflaged as a solution if not a better solution to the impending national crisis and the efforts made to sell it to an Average American doesn’t leave any doubt in my mind that wall street thinks that an ‘Average American is a stupid’.

 American President George 'the' W Bush was very much clear about what he had to achieve when he set out to give his speech on the impending financial crisis, this is not the first time that he had done something like this but this time he did it with much ease as compared to his propaganda on “War on Terror” – “Rule by creating panic", yes that’s what he did,. His words like "America could slip into a financial panic and a distressing scenario would unfold. More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs. Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And, ultimately, our country could experience a long and painful recession."

       This Financial bail out is nothing but an effort to keep the rich RICH at the cost of an ordinary taxpayers money. Why should the tax payer take the burden of someone's wrong choices, when the very same tax payer might go out of job because of the cost cutting policy followed by these major corporate giants? 

                                            Well for people who have been advocating growth at all cost and people who have been advocating this bail out plan need to understand one thing " a continuous and unchecked growth becomes cancerous" and that's what we are seeing now, America’s Top financial institutions have become cancerous enough to affect the entire American economy and the world economy. America's debt is three times its GDP. So you know the truth now. No one can keep himself prosperous for ever by borrowing and someday things have to fall and when it does it will be as worse as what we are seeing now.

                                                To me this looks more like an effort trying to inflate a balloon which has too many holes, More over the present financial crisis is the cumulative effect of the 1990’s financial crisis which saw many banks becoming insolvent and the 2000 dotcom burst. This $ 700 billion that’s going to be injected into the economy will bring in a much greater disaster in January next year.


Teshu said...

American people are stupid :) The fact that they could elect someone with Bush's intellect twice over is adequate proof of that.

As regards the bail out plan - the common argument is that why should the ordinary taxpayers pay for the wall streets mistakes. But dig deeper, it is not the mistake of the wall street. It is the mistake of your neighborhood bank. They are the ones who first gave subprime loans. But no one in US will walk down to the bank at the end of the road and ask the manager why he gave loans to undeserving people (again why I feel American's are stupid because they forget who started the rot). After all if that manager had not given loans to people withe No Income, No job no Assets (NINJA loans), US wouldn't be in such a mess.

Second people say the Wall Street bankers made wrong choices. But did they? No they chose what majority of country wanted them to trade on. People chose risky investments like subprime trading to make more money from their pensions. And traders did just that. So who made the wrong choice? People did...but no they are stupid and now want to blame the street :)

And so you know what...the only smart man out there is actually Bush. Because he looks stupid, acts stupid and people think he is stupid. And he takes everyone for a ride.

Prasanna Kumar said...


Now this is becoming quite tricky, you say that the bank managers are the one’s who need to be blamed, but the sub prime loans as far as I know are loans issued to people who have a heightened perceived risk of default, the banks involved themselves in such riskier transactions because they got convinced by the honchos of wall street that it would be more profitable, more over the nature of sub prime lending seems to lack any thrust of moral hazard, in that case what do you expect the bank manager’s to do, when they are pushed to meet their targets . I don’t quite buy your argument that it was the American masses wishes that Wall Street tried to full fill but I think it’s the other way around. After all who would choose a riskier investment which might jeopardize their life savings or pension money?