how the bailout failure affects us

NY Stock Exchange

I didn’t see that one coming. Then again, nobody did.  I’m a little bit shocked – our family’s net worth dropped about 10% in one afternoon, wiping out years of savings – but then again, I think the cure would have been worse than the disease.

In every analysis and op-ed I’ve read, I’ve failed to understand one point:  why should the government assume the risk taken on by private companies?  Yes, it’s all interconnected, and yes, there’s a trickledown to Main Street, etc., but wouldn’t there be a trickledown effect from taking on an additional $700 billion in debt?  The rule of capitalism is that risk is inversely proportionate to reward. Now we are seeing the market adjust itself to where it should truly be, sans government meddling.

I know the most likely scenario is a watered-down bill, similar but less expansive. That’s a good thing.  The pain we’re all feeling (and trust me, anyone with a toe in anything more complicated than a checking account feels this) is the cost of living in a capitalist society.  No socialized medicine, no socialized pensions, and hey – no socialized banking bailouts.  It’s philosophically consistent.

I’m tired of worrying about macroeconomics. I know that I’ve written more articles than usual on that subject, simply because it’s hard to pretend it’s not happening.  It is.  But let’s face it, the same things are true, over and over again, regardless of the Dow’s value, or the latest governmental power grab or the death throes of a theoretically conservative administration.  Here’s how the bailout failure does not affect us; you still need to:

  1. Spend less than you earn. If you don’t need it, don’t spend money on it.
  2. Find out ways to earn more. Don’t sit on your current income.  Hustle.  Make more.
  3. Stay healthy. Getting sick in America is going to be a more and more expensive event.
  4. Take care of your environment. Even if you don’t believe in climate change (and if you don’t I’m not sure what I could convince you of, anyway), keep your little corner of the world clean as you can.
  5. Be kind. Not much else matters in your interactions with the world.  There is evil in the world, and it must be fought, but let’s face it – in most human interactions, a moment of kindness is worth a month of assaults.
  6. Vote. I know presidential elections get all the attention, but let’s face it – yesterday’s events were the results of votes by congressmen, ALL of whom are up for re-election this November.  Make your voice heard.

So tomorrow try not to read the papers, and eat a piece of fruit.  The Vitamin C and fiber will do you good. Keep your chin up.

photo credit: pheezy

  • http://scottgreenough.wordpress.com/ scootdawg

    you're dead on…worry about yourself and take care of your own house first.

    You hit on something…Republicans are not conservative anymore. They are no different than Dems. Its just a matter of priorities and actions. But they both want the government to handle everything and it sucks.

    And its also true about the presidential election. People take that more seriously than their city council who have way more influence over your day to day than the feds.

  • womanintraining

    Great article, thanks. I like what you had to say about kindness. It's worth its value in gold and we'll all be needing it more in the coming months.

  • http://www.bargaineering.com/articles/ jim

    A couple House Republicans did. :)

  • http://www.thewriterscoin.com Writer's Coin

    Seriously, people worry way too much about all these things they have no control over, while their finances sit in the corner, neglected and suffocating.

  • Kelly Rusk

    What affect will it have now that the bailout bill has passed?

    Though obviously your tips are helpful in any situation!

    • http://www.bripblap.com Steve

      Kelly, I think we'll see little change in the short term. Psychologically it's going to help the large corporations, and it may ease the credit market a bit. For the rest of us? I don't think we'll see much change until a few years from now when that $700 billion's been spent and the next financial crisis hits us. That money isn't just created from thin air – it represents loans from China, additional interest on the national debt and another groaning strain on the fiscal soundness of the US.

      But I do expect in the short term it will help the market – more from warm-n-fuzzies than anything – and it will help calm foreign markets too. But we'll see – when Hank Paulson has to go to his buddies at Morgan or Citi or wherever and negotiate fair prices for worthless securities without any real oversight, we'll see how our money gets spent, won't we?

  • bripblap

    Kelly, I think we'll see little change in the short term. Psychologically it's going to help the large corporations, and it may ease the credit market a bit. For the rest of us? I don't think we'll see much change until a few years from now when that $700 billion's been spent and the next financial crisis hits us. That money isn't just created from thin air – it represents loans from China, additional interest on the national debt and another groaning strain on the fiscal soundness of the US.

    But I do expect in the short term it will help the market – more from warm-n-fuzzies than anything – and it will help calm foreign markets too. But we'll see – when Hank Paulson has to go to his buddies at Morgan or Citi or wherever and negotiate fair prices for worthless securities without any real oversight, we'll see how our money gets spent, won't we?

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