Tuesday, October 07, 2008

Modern Day Charles Dickens Era

In the midst of the bailout crisis, I worried that taxpayers were being played. It looks like my concerns were well-founded. Via Dean Baker:
Remember way back to last week when it was going to be the end of the world if Congress didn't pass the bailout package? Remember the Washington Post's account in which Treasury Secretary Henry Paulson told President Bush, "there is no Plan B."

Well, it looks like the Fed has discovered a Plan B. It turns out that the Fed can buy commercial paper directly from non-financial corporations needing credit to maintain operations. This will keep the credit markets working even if the zombie banks aren't up to the task. In other words, the threat of a complete meltdown in the absence of a bailout was nonsense and the media once again got taken for a ride by the Bush administration.
Adding insult to injury, we now find out that the limits on executive compensation were essentially meaningless too. When do we get our bailout, or do we have to work till we drop over dead? That scenario becomes more probable with each passing day.

Via the AP:
Americans' retirement plans have lost as much as $2 trillion in the past 15 months, Congress' top budget analyst estimated Tuesday.
Public and private pension funds and employees' private retirement savings accounts — like 401(k)'s — have lost some 20 percent overall since mid-2007.

Rep. George Miller, D-California, summed it up best: "Unlike Wall Street executives, America's families don't have a golden parachute to fall back on. It's clear that their retirement security may be one of the greatest casualties of this financial crisis."


Lew Scannon said...

do we have to work till we drop over dead?
In a couple months, we'll all be thankful if we still have a job..........

abi said...

A lot of this mess is about an intangible - confidence. I think things would be worse if the government did nothing.

AP is right about retirement savings being hard hit. We're in for quite a shock when we get our September 401k statements.

JollyRoger said...

Of course the bailout was all about transferring even more wealth to Chimpy's cronies. That's why it is imperative that we elect Barack Obama in November, so we can at least see a final day for the thievery.

Praguetwin said...

Geez, if only we had privatized Social Security a few years ago everyone would be SO much better off.