Bailout = Not Working
The Dow Jones industrial average is below 10,000 points for the first time in four years, plummeting nearly 500 points for the day (as of 3:30 p.m.) following a Friday loss of 157 points.
Just today, the Dow has lost 5% of its total value, putting it below 10,000 for the first time since October 29, 2004.
The slippage is occurring despite passage of a massive $700 billion government bailout bill last week that was supposed to steady the markets and stave off a global financial crash.
Apparently turmoil in foreign markets in Asia and Europe – combined with America’s worsening job picture – are proving to be bigger and badder than the biggest, baddest government intervention in the free market since the Great Depression.
As we noted just hours before Congress cast its fateful vote Friday, the bailout model was already showing questionable returns as global giant AIG had blown through $61 billion in government credit and was “still seeing tightness in the marketplace.”
Yeah … that probably should have been a sign that the government’s gargantuan authorization of additional taxpayer debt to purchase a bunch of worthless assets wasn’t going to be such a hot idea.
But in addition to its cost and the fact that it isn’t going to work, the bailout also raises a host of constitutional questions and more elemental concerns regarding America’s commitment to the capitalist economic model.
S.C. Rep. Jeff Duncan expressed some of these concerns in a post on his blog, Walk-On Legislator:
I am fearful that this expansion of the power of the Federal Government will further erode our Republic. It, too, is obvious that the failures of past Congresses to regulate the mortgage industry, especially relating to Fannie Mae and Freddie Mac … played a huge part in this economic meltdown.
We addressed these same concerns in a story we wrote several days before the Bush Administration (with the support of the Democratic Congressional leadership) launched its $700 billion bailout plan.
That plan was then sweetened by Senate Democrats looking to pick up Republican votes in the House, which initially rejected the proposal a week ago before approving it last Friday.
If you’re interested, you can get updated information on the Dow Jones and other U.S. financial markets by clicking here.
Comments
By Everything Matters on October 6th, 2008 at 3:13 pm
Dare I ask you to remember a bit of history leading up to the Great Depression?
8 years of unregulated corporate greed from a republican admin. lead to this.
See a brief video to learn more about the history of the Great Depression.
http://www.youtube.com/watch?v=PgAHbXtpYV8
By fitsnews on October 6th, 2008 at 3:24 pm
Well in this case it was three-plus decades of unregulated government intervention in the lending markets … and the failure of both Republicans and Democrats to stop it when they had the chance.
A plague on both their houses, if you ask us.
-FITSNews
By Alexander Higgins on October 6th, 2008 at 3:30 pm
Everyone knew the bailout wouldn’t work, even the crooked politicians who decided to send every household an $18,000 tax bill even though economists told them it would not work.
Today’s sell of is only a prelude to the real crash of over 20% that will come in the next week or so. Why? Just look at the history of the Great Crash of 29 and the crash of 87. Right now were only experience sell-offs before the real crash happens.
See my blog post here
http://blog.alexanderhiggins.com/2008/10/dow-crashes-below-10000-another-20-stock-market-crash-looms-ahead.html
By Where's my scorecard? on October 6th, 2008 at 4:55 pm
When did Duncan put you on the payroll, Will?
By Jeff Duncan on October 6th, 2008 at 7:13 pm
Heck, I can’t afford Will……have you heard about the real estate market lately? That is how I try to make a living…..DUH! ;)
By Harry on October 6th, 2008 at 7:44 pm
Jeff Duncan was in real estate, and then a banker. And now he knows nothing of the wide spread criminal or unethical activitey that lead to the bailout?
Buy a vowel, and get a clue, Rep Duncan.
By reggie on October 6th, 2008 at 9:19 pm
who would have thought…
By Iota on October 7th, 2008 at 9:36 am
At least Rep. Duncan is speaking out though he may not be an expert on the subject.
Our House and Senate leadership have remained mum on the subject of our national economy. Could it be that they have remained silent because they have put this state in its own economic crisis?
Could it be that they have remanied silent because they know that the more they talk about “Chicken Little” and how our economy is fine the more they get acquainted with the feel of the back of their tounges with their toes?
Targeted cuts are now needed after our own House and Senate, made up of what they describe themselves as, Republicans mind you (less government, lower taxes, curtail wasteful spending…etc), now have to come back to Columbia and do the job that they are hired to do in the first place.
Let’s hope they learned their lesson…..so kudos to Rep. Duncan for taking the initiative and speaking out. Maybe your colleagues, Rep. Duncan, will formally speak out on this subject….and offer an apology to the South Carolina public for their failure to do their collective job.
By rick on October 7th, 2008 at 12:14 pm
I believe that the markets are still stuck because the people making the decisions don’t trust anyone right now. Had we of had a good old perp walk and public confession, mixed with a strategy for fixing what went wrong, we may well have had a different reaction. Lets face it folks, you can’t throw money at a problem and expect it to be solved. Giving easy credit to everyone has created a world of “everyone owes everyone” all backed by paper and a computer spreadsheet. As long as the majority of the politicians believe we remain ignorant of the causes surrounding this debacle, the less likely they are to take ownership and fix the problems. One things for certain we need a leader…..
By Jeff Duncan on October 7th, 2008 at 8:33 pm
Harry: Wrong. Banker for 8.5 years. In real estate since 1995. Probably know a heck of a lot about the economic meltdown and its causes than you could comprehend, since you can’t even read a biographical sketch well.
JD