The shoring up of mortgage mastodons Fannie Mae and Freddie Mac and the $85 billion loan to insurance giant AIG, along with the new "plan" to bail out the banks in the spirit of the Resolution Savings and Trust scheme to the tune of $500 billion to $1 trillion has got me sick to my stomach. The price tag alone should make every taxpayer wretch, as we are the one's paying the bill (and our children, and their children, and their childrens' children). This is a time when we should really question the relevancy of a two party system, when both the Republicans and Democrats decide that banks are more important than the folks who'll end up paying the bill.
To personalize it a little bit, before I was laid-off in May, I entered a Debt Management Plan to payoff old credit card debts. I ran through my severance pay and most of our liquid savings to continue making our payments. When I tried to renegotiate the sum, I was told by a representative of one our esteemed large banks that they would not help, and one of our credit counselors told me "they don't care if you go into bankruptcy, they are insured".
I grant you that the financial markets are in a much bigger jam than I am, but ask yourself how they got there? Did you ask them to take the money you pay in interest on your homes, turn it around, and encourage people to buy houses who couldn't realistically afford them? Did you ask them to charge interest rates in the lower 30% range. Bad management practices should be rewarded with $34.4 million in compensation for Lehman Brothers CEO, Richie Fuld (with the top five officers making a jawdropping $81 million), or AIG's Bob Willumstad who will leave with $7 million for three month's work?
And I am not wholly unsympathetic to the thousands of financial industry workers, particularly those who served to support the bigwigs, who came up with the lunkhead schemes, and then were kicked to the curb. It must be very difficult to live in communities where so many have been hurt by your firms and to find yourself in the same boat-- and having to pay for it!
The curious thing is now the federal government "owns" majority shares in Freddie and Fannie and AIG--what is it going to do with all these bad investments?
Now I am working to pay off my debts in full. I was raised to honor your commitments and debts. It is sad to me that while I'm paying off my debts, I'll have to pay off those of the CEO's too. Maybe we need to file a class action lawsuit against the government,as "investors," to get our money back.
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