Response to the Pro-Bailouters

So yesterday evening, after I posted my first blog entry, I got a message from my friend in STL, insisting that I was taking the wrong stance on this bailout. He believes that this bailout is necessary to relieve the stock market for the time-being, considering that American families are suffering from this crash.

My response is that we've been headed towards this financial crash for years because of irresponsible military spending, corporate welfare, and incorrect monetary policy. This crash is a result of the problem, not the real problem.

Let's see...we're not only still in Iraq and the problems there still haven't subsided, but we also recently butted into the problems in South Ossetia, Georgia, when we knew we couldn't afford any more spending, basically just to try and keep Russia in check. So now we want to give $700 billion in tax payers' money to corporate America? And hope that it trickles down to help my family in Mississippi, and then naively think that we won't have to face the long-run economic consequences of inflation and extreme debt? Yeah, I don't think that's such a smart idea.

Wanna really help American taxpayers save money? Pull out of Iraq and quit trying to provoke a second Cold War with Russia.

According to Senator Ron Paul's website there are 3 main reasons why Congress should reject these bailout proposals:

"a. It is immoral - Dumping bad debt on the innocent taxpayers is an act of theft and is wrong.
b. It is unconstitutional - There is no constitutional authority to use government power to serve special interests.
c. It is bad economic policy - By refusing to address the monetary system while continuing to place the burdens of the bailout on the dollar, we can be certain that in time, we will be faced with another, more severe crisis when the market figures out that there is no magic government bailout or regulation that can make a fraudulent monetary system work" (See http://www.ronpaul.com/.)

Well put Senator.

Contact your Congressman

I would like to stress that all y'all contact your Congressman on the bailout I discussed below, regardless of your opinion on the issue. We live in a democracy, and we all have the right and responsibility to tell our representatives what we want done in our nation.

Go to this website, and on the top left you'll see a space where you can type in your zip code and your representatives' contact info will pop up: http://www.congress.org/congressorg/home/

Bush's bailout plan fails in Congress, but wait! the Fed still controls our lives...

According to the Washington Independent's article from a week ago, the Bailout Bill "would allow the Treasury to pay up to $700 billion for whatever 'troubled assets'...from whatever banks at whatever price it sees fit." A recipe for disaster. But, there's hope: Congress did vote against the bailout plan.

However, Sen. Ron Paul from Texas says that, apparently yesterday "the Fed pumped in over $600 million in credit into the markets, without Congressional approval." Sen. Ron Paul then goes on to say that, still, he doesn't understand why Congress even bothered to vote, because at the end of the day, the Fed has the power to make the final decisions on corporate bailouts. Hmmm...good point, buen señor.

So basically they hold this vote just to help the people feel like we're taking part in a supposed democracy, and to make sure there isn't soooo much opposition. If the Fed does agree to bailout these companies, however, the dollar will suffer: basics of of Political Economy 101. Even if the pressure to resist bailout is strong, and the Fed wisely decides against bailout, the Fed still has the power to create money (to ease our current financial problems), which will thus cause inflation, in our already falling economy.

I'm going to write a letter to my Congressman. I can't have the dollar-euro exchange rate suffer anymore!