I am not a financial expert but after spending the last 10 days being buried by news reports and commentary about the crisis on Wall Street I have come to the conclusion that there seems to be plenty of blame to go around.
The folks on Wall Street kept pushing the envelope of good economic sense because they wanted to squeeze every last penny out of the market and in the process they destroyed their respected institutions by burying them in what ended up being unsecured debt. The government and quasi-governmental entities like Fannie Mae and Freddie Mac played their part by acting as enablers and in some cases even originating the dangerous practices that led to this mess. All the while our elected officials on both sides of the isle hobnobbed with these financial geniuses as long as they put money in their campaign pockets. The unelected bureaucrats don’t escape blame either. I mean, why do we (the taxpayer) fund the SEC and all these other regulatory agencies if they are going to allow something this bad to happen.
It seems like the big shots in New York and Washington think they have it all figured out. They want to take advantage of Capitalism as long as they are making money. But as soon as it looks like they might lose their shirt they want to turn on the socialist spicket and punt the debt to us. The bottom line is the greedy dogs in New York hooked up with their buddies in Washington and setup this system. If the government hadn’t been involved in the first place I doubt that Wall Street would have been so willing to take on so much risk. A perfect example of what happens when the government gets involved.
As far as I am concerned I think we should let them sink in this flood of debt that they created. Yeah I know that this all started when home values started to drop and people started missing their house payments. But aren’t these guys supposed to know how to manage risk and identify a financial bubble? And whose idea was it to allow people to sign “Sub-prime” loans with variable interest rates? That sounds like something a used car salesman would try to pull. I understand that it would really hurt our economy for a few years if we don’t bail them out but I would rather struggle financially for a couple of years and come out on the other side a little wiser then to set this precedent of huge government intervention. I mean the taxpayer is going to have to shoulder all this debt that our government is planning to take on. Then it will have to borrow to pay it off because the government doesn’t have $700,000,000,000 laying around. Which means the taxpayer will not only have to pay for the bail out but the interest payments too. Seems to me it is going to hurt either way.
I say let them drown!