Tuesday, September 30, 2008

Why The Bail-Out Bill Failed: Democracy ... ?

Well, jeez, I was as surprised as everyone else.

Many representatives from both sides of the House spoke against it, which was expected, even including Nancy Pelosi, but even more actually voted against it.

What happened was this: the American people seems to have decided that they didn't want their tax dollars going to buy another yacht/jet/house for the bosses of financial institutions who'd made big such mistakes with the customers money.

Whatever the rights and wrongs of the bill, there was a huge groundswell of public opinion against it, and they decided they didn't want it, so they used the only weapon they had - the telephone, the internet, and the fact that the elections are very close. They called, messaged and emailed their representatives and told them straight - "Vote for this bill and you can pack your bags."

How do we know this? Simple. Those that voted against the bill were predominantly those who had either expressed strong opposition before voting or are in marginal seats, whereas those that voted in favour of the bill were mainly those who had either stated clearly their support, or are retiring at the next election.

Well, all the pressure put on the decision makers worked. Who'd have believed it? People Power Democracy in the USA?

On the Banks? Let 'em go bust. Are we really supposed to have sympathy for these unregulated over-paid button-pushing gamblers? In whom we placed so much trust, yet who have proved to have such poor judgment, to be so universally appalling at their jobs that they have brought down their companies on their own heads? Not only were they gambling with our money - but they clearly are not very good at it. If a steel company, or a dairy business, or a hardware store should get into difficulties, would the Government step in and protect investors?

So your shares and investments have taken a dive. So what? Shares fluctuate all the time. Shares are for the long-term, and they'll bounce back in the long-term. If you were looking for a short-term gain, well, guess what? You gambled and lost. That's the deal.

So your bank is foreclosing on your mortgage because you didn't make the payments? So what. You over-reached yourself. Trade down or rent out, you do what you have to do to get by, but you just had to buy that big house, didn't you? And if you bought-to-let, with the intention of earning money off renters, then I laugh twice as hard.

So you worked in the banking sector and now you're unemployed? Well, I didn't hear you gripe when you used your last bonus to buy that speedboat. You're in banking, for Christs sake - you make nothing for society, you contribute nothing to society, and your entire industry is based on fragile confidence.

As for the market, we take the pain now, then restructure and regulate the whole money business for the future.