It is not a rescue plan. It is a bailout!

Bush, tonight tried to frame the proposed $700 billion investment security bank’s bailout plan as a rescue plan.  It is not a rescue plan it is a bailout.  And it is a bailout of people, not you or me, but people that make way too much money to deserve a bailout.  For example, Warren Buffet today plowed $5 billion into Goldman Sachs.  Why?  To make money and he expects to make money on this bailout.

Bush also called this a liquidity crisis.  He is proposing to treat the symptom and not the cause.  The real crisis is asset devaluation, it is not a liquidity crisis.  A co-worker of my brother in CA bought a foreclosed house last week.  He paid $350K.  That same house sold a year ago for $700K.  That is asset devaluation.  Some bank has an liquidity issue because it has to eat $350K or go bankrupt or get bailed out.

A co-worker of mine related the following example:  A banker was approached by an applicant that made $100K.  The applicant wanted to buy a $900K house.  The banker said no.  The applicant complained and asked to speak to the manager.  The bank manager said to give the loan, “We are going to flip the loan in a month, so who cares?”

Ask yourself these questions: 

Why $700B?  Treasury Secretary Paulson has said less is too little.  Is $700B enough?  Is it just a down payment?

What are we buying with our money?  I hope that it is not just CEO pay cuts.

How are we going to prevent this crisis from happening again?

Why are we rushing to judgment?  Does this remind anyone of the Iraq war resolution?

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