Tuesday, September 30, 2008

What Does “Bailout” Really Mean?

I think a lot of what has gotten Americans so upset over the idea of a “bailout” is the rhetoric. But what does it all really mean? Wayne Fields, an expert on political rhetoric at Washington University in St. Louis, said "talking about it as a bailout has hurt" the plan's chances. That's because most Americans don't understand the intricacies of what's involved but can relate to seeing their tax dollars used to reward those who helped create the mess in the first place.
"I don't think you can change the language now," he said.

Well, I don’t think you can change the language now either, but obviously something needs to be done. And everyone seems to have their own take on how to sell the idea to the American people.

"Let's not call it a bailout. Let's call it a rescue," said Republican John McCain.

Democratic rival Barack Obama said, "This is no longer just a Wall Street crisis — it's an American crisis, and it's the American economy that needs this rescue plan."

House Speaker Nancy Pelosi's take: It’s not a bailout but "a buy in, so that we can turn our economy around."

Bush, McCain, Obama and top congressional leaders agree the plan — which would nationalize large numbers of bad mortgages and securities tied to them — is needed to unclog the nation's financial arteries.

According to Bob Herbert, NYT Op-Ed columnist, “for years now the leaders of the right have carried the day and whatever restraints were still intact when George Bush took office in 2000 were quickly removed. And these are the people who led us into the multitrillion-dollar debacle in Iraq, crafted tax policies that benefited millionaires and billionaires while at the same time ran up staggering amounts of government debt. This is the crowd that contributed mightily to the greatest disparities in wealth in the U.S. since the gilded age. They cut the cords of corporate and financial regulations and in many other way hacked away at the best interests of the United States.”

Bush and his cronies have put the entire economy in danger. And many of these people, such as Phil Gramm and Carly Fiorina are snuggled in tight with McCain and we’re supposed to trust these people to act in the interest of Americans today?

I surely am not nearly smart enough to know what the answers to all these questions are, answers that we need and soon. White House spokesman Tony Fratto agreed the administration's initial efforts to explain the legislation to Congress and the public left something to be desired. Duh!!

"We need to be able to better demonstrate that there are impacts for American families, for retirees, for small businesses for larger businesses who are hiring, for our banking system, for the ability to get home loans, for businesses to be able to make their payrolls, their small-business accounts," Fratto said.

He said "it's a hard thing to do" because of the complexity of both the problem and the solution. "There are four or five steps involved ... before you get to the kitchen table of the average American family and how it affects them."

Bush was trying on Tuesday.

Well, guess what? They all need to try harder.

For the VP debate you might want to try this:

Check out this website. I believe you can watch the VP debate here and do live blogging and read other bloggers comments as the debate goes on.


lilalia said...

The fault does not only lie in corporate misspending, but on the sides of politicians and consumers alike. If the bailout is complex, taking four or five steps to get to the kitchen table, than they should explain those four or five steps. My heavens, it isn't rocket science. Excellent post.

lilalia said...

Just read an interesting article by Friedman in the NYT, exactly on this topic. You should read it and see what you think. I particularly like the following analogy of his,

"We’re all connected. As others have pointed out, you can’t save Main Street and punish Wall Street anymore than you can be in a rowboat with someone you hate and think that the leak in the bottom of the boat at his end is not going to sink you, too. The world really is flat. We’re all connected. “Decoupling” is pure fantasy."

Rain said...

Good questions. I did a lot of research on it and still don't understand the ramifications. It sounds like what we are doing is co-signing on a LOT of loans. This buy in thinking is like socialism whether we like that word or not. Government in the marketplace and owning a piece of it. That's not something I like but it is one of those situations where I don't like any of the alternatives. I hope we get a bill that if it hands out money (and Krugman seemed to think we might not but I go back to that co-signing idea and if you co-sign for someone, you might end up picking up their loan), we get transparency for where it goes. I also wonder how a government who is borrowing every day has money for any of this. As a people and government, we are in hock...

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