The fed will bail out its own banks and other sweetheart banks without US government help. No Northern Rock here. It will absorb other financial corps. with problems, or let them fail. Congressional lender bailouts might help or hurt, but the big banks are pretty safe either way, so lender bailouts are a poor way to spend taxpayer dollars.
Private failures like foreclosures are different. We can give people the houses they should not sanely have been allowed to acquire, or we can let prices fall until people with income and assets can afford houses. We can bail out irresponsible lenders as well, or let them share some pain. This is an election year, with no federal term limits. The entire house and a third of the senate are very vulnerable to giving things away to buy votes,
e.g. foreclosure forgiveness, tax deals, more money from heaven, and free extra fries.
The president has gone on record as opposing massive bailouts. He can do so with some resolve, for the rest of the year, because he is a lame duck president, and has no need to buy any votes. Those opposed to massive bailouts might consider encouraging the pres. not to cut and run domestically, if that is really how you think. It is difficult to make a long term case for massive foreclosure and lender bailouts.
Possibly Related Posts:
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- There are a few issues that need to be addressed in these budget questions:
- Get ready for another unemployment report tomorrow
- Stock market should be stabilize for a while in 7000 range
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