Yet Again, It’s the Economy

First it was Iraq. Then it was oil. Now, the economy is front and center this election year.


In summary, here’s what’s going on:


Unlike the investment market meltdown of the 20’s and 30’s, this current meltdown can essential affect every American, not just the rich. What started as a booming housing market in the early 2000’s has turned into bad mortgage loans and ill-advised debt investment in bonds by banks.


Because of lessons learned from the market crash early last century, Wall Street and the Securities and Exchange Commission have become a leader in free market investment regulation. But, unlike Wall Street, mortgage loan and other bank regulations have been slim to nonexistent.


This obviously needs to change, but first and foremost, we need to stop the bleeding.


Late last week and over the weekend, $700 billion was recommended by the White House, Treasury Secretary Henry Paulson and Fed Chief Ben Bernanke to bail out not just Wall Street, but main street. Yes, this move will increase government involvement in an otherwise free market, but to quote Bernanke, “Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy.”


So, instead of individually bailing out companies like Freddie Mac, Fannie Mae and AIG, we will systematically begin buying every bad loan to relieve the burden they weigh on our market.


This makes us, the US tax payer, an investor. In reality, we all may not invest in the markets or have a home, but we all have a vested interest in preventing a 1929 financial breakdown.


Granted, I don’t necessarily agree with growing our debut, making government larger and using tax payer money to bail out the private sector, but the lack of oversight in this area proves we – the people and Washington - are to blame for not being more proactive.


Now, Congress needs to act. I don’t want to hear any in-fighting or partisan bickering about “adding this” or “inserting that” into this vital piece of legislation. This is not a time to worry about helping individuals or companies in your district. It’s about helping the United States and it’s people move past this financial crisis.


This is a non-partisan issue, Congress – get it done.


ER


The Basics in Mortgage Loans and Bond Investment