Board doesn’t understand bailout
The editorial published on Oct. 2 (“Congress Needs to Show You the Money”) raises some important issues and questions about the American economy, but most importantly, it shows the disillusionment of the modern college student in regards to our political system and the foundation upon which it was created.
I must quote Professor Brian Walker when he said that the veto of the $700 billion bailout was “an example of civic participation at its finest.” We, as citizens, have the duty ““ if not the moral obligation ““ to monitor policy as it is passed by our representatives in government.
Our representatives have the duty to vote for or against policies as their constituency would vote. The House of Representatives was created to represent the people. In this regard, I must say that with their phones ringing off the hook, the members of the House did right in voting “no” when their electorate screamed for them to vote “no.”
And in that same vein, it is important for Congressmen to care about reelection. They should care about what their electorate thinks of them, and their electorate should hold them fully accountable for their actions (i.e. their votes in Congress).
Now let’s talk about the bailout itself. If you watched the hearing, you would have seen how evasive the bailout proposal was. What exactly were we voting for? Are we supposed to trust that the books somebody else has seen but won’t show us are worthy of dumping a bunch of money into? The non-transparency of the whole thing undermines our political system. Yes, this may bail out several large corporations that were integral to our economy, but they were built upon faulty investments and regulations in the first place. More regulation should have been enforced as these companies were built up. Giving a handout to them now is like giving a crack addict “one last fix.” Our country needs a huge purge in our financial sector, and giving out “free money” is not going to do it.
Secondly, as young college students, I think the editorial board has failed to see how much money we are talking about. $700 billion is a lot of money. I’m sure you realize it will be our generation that will have to foot the bill.
And what about the taxpayers and shareholders? Don’t they have rights? What about every investor in these companies who will never see a return on their investment and every shareholder whose shares are worth nothing? The bailout is not going to give anything to these people and, if anything, will cause them to pay more via taxes.
Finally, is it fair to give certain corporations a bailout and not others? You criticize the laissez-faire economic values that allowed for this collapse, yet are endorsing a handout to a few select companies. Does that morally make sense? Is it right to let the others fall but keep a select few afloat?
You are right when you say that the economy should not be kept “free of a governmental hand.” I must agree that rash deregulation in the late ’90s and early into the millennium allowed for these measures to occur. What most don’t know is that measures established in the Clinton era, such as the repeal of the Glass-Steagall Act, set our country up for the economic failures we are experiencing now.
There are always people who blow the bubble bigger before it bursts. Short-selling done by investors in these failed companies also perpetuated the problem long after everything fell. There are a number of factors we can blame, but I don’t advocate a bailout to fix these problems.
What our country needs now is a purging of its evils. Big businesses who had a foot in every unsecured investment, and then used that leverage to invest more, should not be given a handout. Our economy will suffer, but at least not at the expense of our government expenditures.
I must say that I find it comical that your article accuses citizens of not watching government closely enough. The vetoing of the bailout was citizen participation in politics at its finest. It’s also obvious that your own efforts to stay informed left you with an idea of what happened dictated by the Yahoo! News media. Anyone with a basic conception of economics and American government would be able to understand what is going on here.
I, like you, urge everyone to stay informed on this matter and pay attention during the troubling times ahead.
Erika Roby
Fifth-year, political science, Spanish and Portuguese
Reckless loans caused crash
The real explanation for why the bailout bill was rejected Monday is not due to reelection concerns; in reality it was self-centered reelection fears that got us into this economic mess in the first place. It was the federal government’s continued encouragement of reckless home buying that created the bad loans that have caused the “crashing financial system.”
Laws such as the Community Reinvestment Act forced banks to give loans to people who normally would not have been granted these enormous loans in the first place.
Representatives seeking reelection actually caused the budget crisis a long time ago by creating policies that appealed to lower-income voters. The bailout rewards these policies and the people who sponsored them, threatening future Americans with the price tag of bad government policies.
While some government laws in the past have been helpful, such as the Fair Housing Act in 1968 that protects home buyers from non-credit-related discrimination, the government is ultimately responsible for enabling the situation we find ourselves in today by taking this idea of fairness in housing too far.
You have the right to own a home with no regard to your sex, race, age, orientation or creed. But you do not have the right to own a home if you cannot afford it.
An already strained, slow and overburdened bureaucracy is not suited for the handling of even more responsibilities. Allow the markets to correct this without more interference from bad government bureaucrats. Do not allow more government intervention which would only lead to more market distortions. This bill’s failure is a victory for the American people.
Michael Ries
Fourth-year, political science