Wall Street's Sunday Soup Line.

Personal responsibility

We are told, must guide all our actions. When home buyers took on risky mortgages, they were left to fend for themselves. We were told that it is the way things should be. Why rescue people who chose unwise options? How about the majority of those who opted for safe mortgage products, faithfully made their payments, who will compensate them for acting wisely?

How About Wall Street?

Now. let us turn the page and discuss the case of others who made money offering those bad products to those same borrowers. A few names come to mind: Bear and Stearns, Indy mac, Countrywide, Fannie Mae, Freddie Mac, Lehman Brothers. Others are rumored to be in dire straights: AIG, Washington Mutual, etc...
For those, the situation is different: they are either "too big to fail" or "too important" that if they failed, the whole world economy would suffer!(Globalization oblige).

Same situation, different remedies.

On one hand, you have the hard working, tax paying Americans, on the other, you the mighty lobbyists laden corporate movers and shakers. The former gets the boot, the later gets the loot! The irony in all this is that the one who gets the boot has to pony up the loot that bails out the all powerful to whom they owe money! Call it what you may, but it sounds somewhat backward.

The Pavlov Effect in Wall Street.

Big institutions have been conditioned to receive bailouts. All they have to do now is make bad loans, earn fabulous sums of money, cry wolf, and uncle Sam comes to the rescue with taxpayers' money, those same taxpayers who are getting foreclosed on at a rate of 8.500 a day! You do not get a tax relief when you are in foreclosure. Your employer still collects taxes for uncle Sam, even if you lose your home!

Try Something Different.

If, as we are told, the delinquent taxpayers are the reason why the federal government must bailout these financial institutions, why not use a different approach? Let us do what sounds normal: give the taxpayers money (mandatory loan modification, tax relief, subsidized interest rates, etc...) so they can pay their mortgages, lenders will not have to be rescued, and see if the delinquent taxpayers are really the reason why big banks are failing. We may find out that there is more to the notion been sold to us today.

Let's take this case scenario: if Joe owes money to the electric company, when Joe receives help from the local charity or other program, he pays his electric bill and we do not have to bailout the utility. Wouldn't the same work for mortgages?
If the utility fails, it will not be because of the unpaid bills, it could be poor management or something else. We will not know for sure why Bear Stearns, Fannie and Freddie failed because we bailed them out before a full disclosure was made.

Shoot First, ask questions later.

This seems to be the Fed's current policy: bailout first and explain later, if ever. Since the feds are playing with our tax dollars, why wouldn't we have hearings in front of our representatives and let them decide if that's the best use for our taxes? After all, they represent us, and they hold hearings about more mundane issues...

Only time will tell. There are bound to be more Sunday night announcements in the coming weeks. We will find out who is the last beneficiary when we turn on our favorite news source: TV, Internet or when we buy a copy of our favorite newspaper the next Monday!
God Bless America!