22 Sep Say No To The Bailout And Let The Financial Industry File Bankruptcy Part I
As an American Citizen and a Bankruptcy Attorney, I am torn on the bailout issue.
As am American Citizen, I am outraged that our Government let this happen and did nothing for the last year and a half, and now they are making the case of global disaster if something isn’t done immediately.
As a Bankruptcy Attorney, I am inclined to say let these financial giants file Chapter 11. Plain and simple Bankruptcy works. It gets the bad debts off the books and gives a fresh start. The problem here is that bankruptcy would have a domino effect because of the way that Wall Street structured its financial transactions.Let’s face it, the financial services industry is out of control and no amount of money is going to fix this problem. Our leaders now think that by throwing money at the problem, we are going to stabilize the financial markets. Today the market was down over 370 points, and last week the stock market saw outrageous gains and losses on speculative information.
President Bush is asking Congress for a blank check to bailout the financial industry. Why? Have any details been given to the American People? How come all of the negotiations have been hush-hush? Why wasn’t Lehman Brothers bailed out? Why was Lehman Brothers allowed to file bankruptcy? I haven’t reviewed anything in that case which explains the need for a bankruptcy on that specific day. Although I am sure more information will come out as the Lehman case unfolds, the same is not happening with the bailout.
I ask again, what has the Government ever fixed by throwing money at it? Simple answer, Nothing. The same will hold true here today. We are being intentionally kept in the dark, something the Bush Administration seems very adept at doing. For the past year, the Bush Administration has been procrastinating on the housing crisis and down-playing the seriousness of the situation. Now that the big banks and Wall Street are on the chopping block, Government intervention is absolutely necessary. The Bush Administration is going to have to realize that the American citizens are sick and tired of having to bailout these financial companies while worrying about how they are going to pay their own mortgages.
I would like to hear the arguments in favor of the bailout. So far all we have heard is that if we don’t bail them out quickly, there could be devastating consequences. Well, that may be true, but it is a general statement without too much substance. In the alternative, adding a trillion dollars on the backs of the American citizens could have devastating consequences as well, but our fearless leaders are willing to take that risk. I would like to decide for myself after seeing all of the facts.
I want to see some specifics. I want to know how much this is going to cost. I want to know who is going to get what money and what they are going to provide as collateral. I want to know why these criminals are not going to stand trial. I want the government to explain why they haven’t done anything to help its citizens escape foreclosure for the last two years but now sees a crisis. I would never hand a blank check to anyone, not even the President of the United States. This thing stinks.
If I sound like I don’t trust our Leaders in Washington, you are correct. In Part II, we will look at more arguments why this bailout is a bad idea.
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