The Bailouts

I view the government's possible bailout of major financial institutions with terribly mixed emotions. I understand the concern for what could happen if we didn't do it for international players like AIG, but where does it end? What safeguards are going in to prevent the same thing from happening again? I don't like having my taxes used to bail out businesses that shouldn't have gotten into the mess in the first place. The same holds for bailing out borrowers who gambled on the market going up then got caught when the bubble burst. In fact, I'm tired of seeing the taxes I pay go to helping people continue to sit on their backsides.

In an ideal world, there would be no bailout. We would let the perpetrators stew in their own mess. And that still might be the best thing to do. But, if a bailout plan goes into effect, there are several safeguards that should be put into place, to wit:

• Require minimum down payments of no less than 10% on all future residential purchases based only on strong borrower credit ratings;
• Disallow subprime loan schemes that jack up future interest rates;
• Encourage all stockholders to fight for control of executive compensation in private corporations;
• Continue a ban on "short" sales of stock in financial institutions indefinitely;
  Disallow "golden parachutes" for CEOs of organizations being bailed out;
• Declare a moratorium on all new residential construction until current used home inventories are back to normal levels.

We must do all we can to prevent a repeat of the mess that has led to the bailout fiasco. Keep government's involvement to a minimum and limited to oversight responsibility and sensible regulation of the financial industry.

The bailout plan first proposed by President GWB went through supposed bipartisan committees last week and over the weekend of September 26-28, 2008 was voted down by the House on the 30th. The vote was a clear indication that many in this country are uncomfortable with the whole concept of a government bailout and intervention in the private enterprise sector. Taxpayers are tired of non-taxpayers living off the fruit of their labors and resent having their taxes used to shore up the greedy folks on Wall Street.

Remembering 9/11

Memorial services are being held all over the country today on the 7th anniversary of 9/11. For many, myself included, the sorrow and anger return on each anniversary more strongly than the year before. The sorrow is for the 3,000 souls who perished in the Twin Towers, at the Pentagon and in Shanksville, PA. The anger is for the ungrateful people who damn the USA and blame us for every ill in the World, the finatics who hijacked the planes to cause the catastrophe and their Muslim extremist leaders. I don't believe time will ever lessen the intensity of those feelings.

We've been fortunate that we haven't been hit again despite our vulnerabilities. Our port facilities are still vulnerable. Progress is being made to establish port facility defense measures that work, but we still have a way to go. Meanwhile, we must remain alert both as a nation and individually. It will continue to demand our patience with luggage and other inspections at airports, court houses and other sensitive areas, but better that than more catastrophic attacks from people who love death and hate life.

The Wall Street Crisis

Greed can be a very destructive disease. We're getting a glimpse of it now with the bankruptcy of Lehman Brothers, the sellout of Merrill Lynch to Bank of America. the crisis at American International Group, the bailout of Fannie Mae and Freddie Mac, and inordinately high executive compensation and equally ridiculous large "golden parachute" packages. Each of the aforementioned organizations and policies defined greed in the highly leveraged mortgage market that finally resulted in bursting the housing market bubble. But they weren't alone.

In their quest for huge gains in the value of residential properties, many buyers took advantage of low interest, subprime mortgage plans thinking they would sell at a higher price later. Many held on too long and were caught with a mortgage principal greater than the market value of the property they held. Others faced increased loan interest rates they couldn't afford. It's hard to feel sorry for those folks. Meanwhile, the lenders sold the mortgage paper to investment houses, much of it subprime, in bundles on which the investment houses thought they could make a killing. When the bubble popped. the investment houses and other lenders were left holding paper of little or no value. It's hard to feel sorry for them, too.

The fact is a lot more people are being hurt as the housing market continues its downward spiral which has now been joined by a falling stock market. All stock investers and people living off retirement pay backed by stocks and mutual funds are hurting. Home owners who continue to make payments on mortgage commitments are being hit with a double whammy. Not only is the market value of their homes tumbling but theyare paying ever higher property taxes as municpalities, counties and states seek to meet greater demands for tax-supported programs.

Solutions

There are no easy solutions. As a conservative I cringe at the thought of having more government control over our business activities. Yet something has to be done to reign in the greed so apparent in for-profit, private sector boardrooms throughout America. That's a responsibility of stockholders. Executive compensation has gone wild as have prevailing executive retirement packages. All one need do is check these factors in recent turnovers in the managements of Merrill Lynch, Bear Stearns, AIG, Fannie Mae and Freddie Mac. And they are not alone. It's going on in every major corporation and even many lesser ones all over the country and it has got to stop.