It's going to happen. Wall Street is going to get bailed out at a cost of $700 billion to the taxpayer. It makes me sick to think that Congress, with their ultra-low approval rating, is going to saddle more bills on us and that those bills are going to be passed along to our children and grandchildren.
Well, we voted for change in 2006 when the Democrats took over and now we are really getting that change. It just isn't the change that the Dems promised us.
On the way into work today, I heard a caller on a morning talk show suggest something that we should all look into. He offered that we should all pull whatever money we have out of the banks being bailed out and invest it instead in a bank or institution that operates on more sensible business practices. That sounds like a very good idea. We need a list of all the banks that will be partaking of this bailout so that we'll know which ones to pull our money out of.
You may ask: "Why pull your money out if they are getting bailed out?" Because they will get right back into the same trouble as they will continue to operate under the same bad business principles that got them here in the first place. Remember the Chryler bailout back in the early 80's? I do.
Here are some that I know of:
- American International Group (AIG)
- Goldman Sachs Group Inc.
- Merrill Lynch & Co.
- Deutsche Bank AG
- Morgan Stanley
We, as a people, should not in the least bit tolerate having these institutions around if they are simply going to suck money out of us every ten or fifteen years. Since the government won't get rid of them, we need to do something.
I have already called my investment broker and asked him to look into which of my investments are held by the above institutions. When he finds them, he will pull me out of them and reinvest the money more sensible institutions.
I recommend that you all do the same.
Now that I've gotten that off my chest, let me share with you some more reasons why we should divest from these failing lenders.
D.F. Krause from North Star Writer's Group has penned an open letter to Congress in which he asks "Where's mine?" Along the way, he notes some of the more ludicrous bailouts that are taking place with Congressional support.
From his column:
| I also see that Congress wants to loan $25 billion to the Big Three automakers. Gosh, why don’t they just borrow the money from banks? Oh. Right. I forgot. Their credit ratings are garbage and no bank in its right mind would loan them money – especially when they’re so busy doing all these subprime mortgage deals! I guess banks aren’t very smart, but even they know better than to loan money to GM, Ford and Chrysler. |
The only time I ever hear the words "bank" and "smart" in the same sentence is when the banks are being criticized, and rightly so.
| Remember when you bailed out Chrysler 30 years ago? Now they want money again. What a surprise! And how did they talk you into that one? By promising that at least this time they won’t bring Lee Iacocca with them? |
That line may have been written sarcastically, but it is absolutely true. Bailing out businesses that practice bad habits will lead to more bailouts in the future. Those businesses should have been allowed to fail.
| Wall Street invested billions in bad mortgages. GM, Ford and Chrysler wasted billions and made crappy cars no one wants. |
Where does it all end? Right at the foot of the American taxpayer.
You can access the complete column on-line here:
Qua Mei? America’s New Credo: ‘Where’s Mine?’
D.F. Krause
North Star Writer's Group
September 29, 2008
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