Lessons learned for us, not government on failing economy
Over the weekend the government made plans to finalize the proposed bailout for Wall Street to the tune of $700 billion, this plan would have been great for those in power, but it did not go through, so now we are in limbo.
When the economy first saw signs of trouble with the mortgage crisis, I was working at the Federal Reserve Bank of Chicago and I could see (from the inside) what was happening. The housing market was soaring, interest rates were low and no one was paying attention to the large loans going everywhere, and going unchecked by the government and Federal Reserve Banks. It was the beginning of the end, and although economists and experts predicted a recession, nothing was done, until it was too late.
Let’s fast forward to this year’s tax season and Bush’s answer to the failing economy; the infamous stimulus checks. While people are still loosing their homes and the economy continues crashing, our government gives everyone free money and again no long-term plan.
Now let’s look at today. Within these last three weeks, (in case you’ve been under a rock) Washington Mutual was bought out by Chase, Wachovia was bought by Citigroup, earlier this summer LaSalle Bank failed, and of course Lehman Brothers collapsed, along with Fannie Mae, Freddie Mac and countless others. It’s as if this is all one very bad nightmare.
While these are all separate situations common sense tells us if one thing fails, it all falls down. So, my question is; if the experts foresaw this happening, why was there no long-term solution applied in the first place? Why did the economy not get STIMULATED as planned? And finally why is the government only cleaning up part of the mess, rather than starting with the people who lost their homes and then moving on from there.
Today we are right back were we started and yet again with no long-term plan for the future and, so I ask what now?
3 years ago