Wednesday, October 1, 2008
$700,000,000,000 bail out money "Potentially alot of money" said Obama
He is known as the great hero of all poor and middle class and enemy of the rich in the Victorian age. He was admired by the public because he rubbed the rich and gave it too the poor. Seams like good idea, not many people will be against it. That is of course except the rich which are the minority. It is believed that 5% of the American's earn 95% of the country's wealth. if you think it is bad how about this?
The United Nations Development Program (UNDP) reported in 1998 that the world's 225 richest people now have a combined wealth of $1 trillion. That's equal to the combined annual income of the world's 2.5 billion poorest people. Interesting ratio!
You might be thinking where i am going with this. Well recently we all have heard about this $700billion bail out. Unfortunately it is being raised from our taxes. Now doesn't it look similar to the reversed version of Robin Hood story.
Ladys and gentlemen, truth of the matter is Robin Hoodism (if there is such a word) has backfired and it switched to the poor and middle class feeding the rich. This $700,000,000,000 bail is the exact illustration of Hoodism, government robbing it's 95% of its citizens and handing it to the big boys club. Biggest gainers from this bail out, if it gets approved likely to be the rich.
Unfortunately both Obama and Mccain, our dear candidates seem to be for this idea in order to win the election. Congressman Ron Paul in my opinion gave clear explanation what is going on.
Luckily bill wasn't passed on the first vote and lets hope it doesn't pass at all!
Now what is your opinion on this? How do you think you will personally benefit from this bail out? Do you see it as sand clock where the poor feeding the rich or vise versa or do you see it as mutually benefiting all?
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5 comments:
Sadly, it passed, and I have somewhat of an idea of how hypocritical the bailout really is.
Why on earth do these investment companies need $700 billion bailouts when they put themselves into this mess? They screwed up with loans, etc. and they're being rescued. This only helps the rich, and is a prime example of reverse "Hoodism," as Aybek said.
Some of my own neighbors are deep in the hole because they need to take out loans to pay rent, buy food, pay bills, etc. What happens when they run into trouble? They get evicted, have to succumb to loan sharking, and get tons in debt. No bailout for honest, hardworking people like them.
Aybek's 1998 UNDP facts are astonishing as is, but 10 years of financial screwups later, the numbers are probably vastly different.
To answer Aybek's question, it doesn't benefit the middle and lower classes (a.k.a. the majority of Americans) at all.
Couldn't agree more. On the one hand, the poor and middle classes have always been feeding the rich (not that theres anything wrong with that, we work and get paid...) but aside from that any time government wants to become involved in the market, it is generally a terrible idea. The reason we are in this situation now is because government is continually making a pathetic attempt at fixing things which, if left untouched, would balance in the free market. When they "help" a company, it shifts expectations in other markets and gives firms more incentive to take-on risky investments to get out of debt and possibly turn a profit. If there's a possibility they could be bailed out, who cares right? This is what happened in the late 1980's with the savings and loan crisis. I think in this and many other cases, when it comes to regulation and control, in the end, LESS IS MORE.
Hey Aybek, I loved your allusion to Robin Hood. Drawing analogies with folklore reduces issues that sometimes can seem so impressively incoherent to the essence, which is-- hey, if this legislation were to pass we'd be pulling our pockets inside out to save the wealthy. I don't have a plan to save the economy, but I do stand by two beliefs--which, come to think of it, can be united in a single requirement: That the poor and the middle class not be obliged to bail out companies without some sort of security that this money will save not individuals (meaning CEOs), but the organization, the workers with whom we stand in line at the grocery store and who are in danger of losing their jobs. They are in the same boat as we, and should not be punished for the behavior of their leaders.
Still, it seems that the middle class is also implicated in the economic crisis, since one of the reasons for the crisis was the number of foreclosures brought about by people spending more than they could afford. So it doesn't seem fair to always point one's finger at the rich, the eternally easy target.
And yet, who is comfortable with the idea of giving that much money to the government? Who's going to be the next Robin Hood to take the money back if they abuse it? Sorry, but no one expects the mody powerful kid in the cafeteria to give your money back after he's "borrowed" it. The middle class needs to be its own Robin Hood, not a government agency.
Interesting post Aybek!
Ron Paul made several interesting points in his commentary about the bailout package that was recently passed. He stated that the government is just propping up a system that is broken and that by passing the package it will destroy the dollar thus defeating the purpose of the bailout package to begin with. He also suggested that there are other ways to deal with the issue such as reforming the system, lowering taxes, balancing the budget or cutting down spending on foreign policy. While these are all terrific ideas Ron Paul, in my opinion, missed one of the key reasons as to why the bailout package was even created other than the money issue.
Sure, the main purpose of the package was to help bailout those whom are in economic crisis but I think it was also to re-instill some sort of confidence back into the financial system. It's not just Americans who are suffering but also members of the European community as well. This to me points to an additional issue that is causing the crisis to worsen day after day. The crisis may have started due to the reasons that Ron Paul gave such as borrowing, overspending and consuming but now it is due to more powerful components such as fear, anxiety and the unknown.
In my opinion, something had to be done. Is the $7 billion bailout package the best plan? I am not sure because I don't know the specifics but what I do know is that it will release the pressure somewhat and provide a little relief until the new President of the United States can come in and spend the time necessary to implement change into things such as reform, taxes and budgeting. Unfortunately, it requires time and oversight to accomplish those goals, which are things we do not have in the current administration.
So while I do have some concern in if we are going to see any of our money back, my bigger concern is in what the new President is going to do to fix the crisis.
I think the ratio very much highlights the gap between rich and poor people's incomes. I like your Robin Hood reference as well. As you said, the idea of the less wealthy having to bail out the wealthier seems like a "reversed version" of the story.
I don't like the idea of having to pay more because other people made big mistakes, but I was hoping that the bailout plan would stabilize the economy a bit. But the economy seems to be receding still (this article comments on how internet companies are faring: http://bits.blogs.nytimes.com/2008/10/09/internet-companies-hammered-by-economic-concerns/), and many of the headlines on the online Wall Street Journal remain gloomy.
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