This isn't just a Wall Street bailout!

[DeepModem Mom]

CNNMoney: This isn't just a Wall Street bailout!
Angry voters led the House to reject the rescue plan. But Monday's sell-off and more turmoil in the credit markets show that a bailout is good for Main Street.
By Paul R. La Monica, CNNMoney.com editor at large
September 30, 2008

NEW YORK (CNNMoney.com) -- The backlash against the bailout worked. The House rejected the controversial $700 billion rescue plan on Monday. But considering that the Dow plummeted nearly 800 points - its worst one-day drop in history - will there now be a backlash against the backlash?

"Many of the folks writing their congressmen last week to say they were against the plan may have looked at their 401(k)s this morning and are rethinking their position," said Bill Knapp, investment strategist with MainStay Investments, an asset manager based in New York.

Sure, stocks rebounded a bit Tuesday. But make no mistake. If Congress doesn't come up with some new plan to address this credit crisis, we could be faced with more gut-churning market drops.

I stated last week why I thought the bailout was a necessary evil and I still feel that way. I understand why people are angry. I'm angry. I am not happy that the government is in this position because of reckless behavior by banking executives, investors and, yes, even consumers.

And I even can concede that there is a lot of merit to the claims by critics that we should let the market sort out the country's credit problems. In free markets, companies should be allowed to fail. And clearly, the market and government let Lehman Brothers fail. However, in the wake of the Lehman bankruptcy, things just got worse and more dominos fell ... AIG, Washington Mutual, Wachovia, etc.

The crisis is now so pronounced that doing nothing is not really a viable option. And what infuriates me to no end is the refusal by some members of Congress and taxpayers to recognize that the consequences of doing nothing will mean more economic hardship for all Americans, not just bank CEOs, traders and New York City....

http://money.cnn.com/2008/09/30/markets/thebuzz/index.htm?cnn=yes

[jtrockville]

1. Where is the guarantee that stock values will increase?

Investing is risky. Always has been. Always will be. Don't ever risk more than you can afford to lose.

[RaleighNCDUer]

2. One day, soon I hope, all these fools who went for MBAs in the 80s

are going to come to understand that there is more to the economy than the stock market.

[romulusnr]

3. stock values don't help main street

Rising stocks only help the rich get richer, and affirm the anti-employee and anti-consumer tactics of megacorporations. It doesn't help Main Street, in fact it more than likely screws Main Street. Someone want to tell me what direction GM's stock went after it started ditching US factories? How about Enron's stock after it started jacking up energy prices? Or oil companies' stock the past three years?

Investment banks don't need Mommy Government to save them from their bad decisions. They need tough love. They need to be punished so that they learn from their mistakes. And Mommy Government needs to change her parenting style to keep it from happening again.

[anigbrowl]

6. This isn't about the stock market, but the credit market.

The credit market is the grease on the wheels of the economy, and the price of using it is going through the roof. That is very much a main street issue because it jacks up the cost of operations for manufacturers, retailers, and consumers.

[hay rick]

7. Voices in the wilderness.

People can't seem to get past the "Wall Street bailout" formulation.

[Ah Xoc Kin]

4. what's a 401k?

"Many of the folks writing their congressmen last week to say they were against the plan may have looked at their 401(k)s this morning and are rethinking their position,"

what's a 401k?

[DeepModem Mom]

5. A retirement investment account. This is from Wikipedia --

The 401(k) plan is a type of employer-sponsored defined contribution retirement plan under section 401(k) of the Internal Revenue Code (26 U.S.C. § 401(k)) in the United States. Similar plans have been adapted in other countries.

A 401(k) plan allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of his or her wage paid directly, or "deferred," into his or her 401(k) account. In participant-directed plans (the most common option), the employee can select from a number of investment options, usually an assortment of mutual funds that emphasize stocks, bonds, money market investments, or some mix of the above. Many companies' 401(k) plans also offer the option to purchase the company's stock. The employee can generally re-allocate money among these investment choices at any time. In the less common trustee-directed 401(k) plans, the employer appoints trustees who decide how the plan's assets will be invested.

[Robert Oak]

8. just the media machine

Stocks bounced right back once people recovered from panic.

These Media outlets are simply pimping this bill. They are determined to shove it down the throats of America and here's the bottom line...it's not the right approach, it's a bad, bad bill.

[bhikkhu]

9. The great depression was caused by just such idiotic economic policies

not by the market crash.
-----------------------------------
-

"If you look at the data, you will see more differences than similarities between the 1930s and today:

* In the crash of 1929 the Dow Jones industrials plunged 40% in two months; this time around it has taken a year to fall 22%.
* The jobless rate jumped to 25% by 1933; it is little more than 6% today.
* The gross domestic product shrank by 25% during the early 1930s; it is up over 3% during the past year.
* Consumer prices fell by about 30% from 1929 to 1933; and the last time I looked they were still rising.
* Home prices dropped more than 30% during the Depression vs. about 16% today.
* Some 40% of all mortgages were delinquent by 1934 compared with 4% today.
* In the 1930s, more than 9,000 banks failed compared with fewer than 20 over the past couple of years.

Remember also it was policy errors, not the stock market crash, that caused the Great Depression:

* Instead of increasing the money supply, the Federal Reserve of that era reduced it by one-third.
* Instead of lowering taxes, Herbert Hoover raised them.
* And to channel whatever demand was left into U.S.-made goods, the government enacted the Smoot-Hawley Tariff Act to keep out foreign products; this only provoked our trading partners to do the same."


http://www.kitco.com/ind/nadler/sep302008B.html

-------------------------------------------------------------------

We have an administration and a Fed chair who seem dedicated to spreading fear and panic. I would hope that the good people here can see through the crap they have been spreading, and causing.