"Recently, we've seen how one company can grow so large that its failure jeopardizes the entire financial system." -Bush in today's speech about the proposed $700 Billion financial bailout.
Personally, this is how I feel about megastores like Walmart. I know it's a completely different thing from Fannie Mae, Freddy Mac, and (reaching further back) Enron etc. Nevertheless the principles can be applied: too much of our money goes into one company and its failures affect us all. In financial institutions these failures are such as we've seen in the news recently. In the retail sector, these failures include product quality, job outsourcing, poor employee treatment, and (an underappreciated problem) aesthetic tyranny.
Ok, so I have nostalgic preference for buying local and locally-owned small business. That is how I would like my life to function -- small circles. Knowing where my purchasing dollars go, even if I'm spending more of them for fewer (but essential) things.
Anyway, after that tangent...
I did not see Bush's speech, but read it, and actually thought it was pretty good (considering, I mean, it IS Bush). It provided a synopsis of the mortgage deflation and ensuing financial crisis that a civilian like myself could understand. It made his plan look pretty good. He even says it will partially (mostly? maybe completely?) pay itself back. Even I know enough to see that as optimistic.
The speech revealed to what extent our economy depends on credit. Buying houses, cars, and college education -- all need credit purchasing power. Watch out, Americans! Bush says. The way things are going, someday, in the very near future, you might not be able to buy things you can't afford!!
Now, I understand that mortgages are necessary for buying houses, and I am the current holder of certain college loans that I think are worthwhile, but all in all, Americans buy way too much on credit. Everyone has credit debt. No one saves money. Financial consultants are always warning us about this problem. Everyone knows debt is a big mistake, but most of us do it anyway.
We can feel patriotic about going into debt. Spending makes the world go round. At least, it keeps our markets moving in the direction we like them to move. If we didn't spend, there wouldn't be Christmas.
How did you spend your Economic Stimulus tax rebate? Remember that? Well, now that you've spent that money on a Wii, be prepared to give it all back, with mucho interest, over the next umpteen years to pay for this big governmental buy out. (Also, be prepared to pay for surgery for carpal tunnel syndrome.)
What would our world look like without as many ways to go into debt? Would everything collapse, allowing China to stage its big takeover? Bush certainly thinks so. You haven't bought a new car since 2006! You might as well be a Communist!
Money. The big world. It all makes me want to crawl off the grid.
Maybe I will someday. As soon as I've paid off my debt...
7 years ago