Out on bail

How bout that sub prime mortgage bail out – or not. I see the ASX is down 5.4% already after what I reckon is a good decision from Congress. 

My questions about the bail out are:

why is the government stepping in to assist failing companies rather than failing taxpayers and their mortgages?
why is the government responsible for the economy anyway? I know it’s universally accepted that that’s the case – but why is it so? Why aren’t businesses and industries responsible for the economy? Why is the government blamed when it tanks but ignored while companies take the credit when it grows?
who would be an executive of a global company now when a failure leads to mass losses – perhaps that’s why the salaries and payments are so high…
whose idea were NINJA loans (no income no job)? whose idea was it to call them that? Where did the “A” in the acronym come from?
why would congress pass a bill that the majority of the public think is a bad idea? who does this decision benefit politically?

Lots of questions, no real answers.

The author

Nathan runs St Eutychus. He loves Jesus. His wife. His daughter. His son. His other daughter. His dog. Coffee. And the Internet. He is the campus pastor at Creek Road South Bank, a graduate of Queensland Theological College (M. Div) and the Queensland University of Technology (B. Journ). He spent a significant portion of his pre-ministry-as-a-full-time-job life working in Public Relations, and now loves promoting Jesus in Brisbane and online. He can't believe how great it is that people pay him to talk and think about Jesus.

2 thoughts on “Out on bail”

  1. I was pleasantly surprised to hear that Congress voted against the bill. I thought for sure they’d want ‘out’ of a probable economic recession… fortunately they’ve cut bait. Might mean some difficulty now, but at least it will get better faster than simply prolonging it all…

  2. Some answers from Ben:

    why is the government stepping in to assist failing companies rather than failing taxpayers and their mortgages?

    first up, i think investment banks that are dying deserve to die. they take on risk, it falters, thats the deal. ppl with money in (any level of risk) investments should stop complaining when they lose.

    next up, i think there is some merit in the government supporting depositors. well, actually, i think if they dont then everything is screwed. if normal depositors have no faith in cash, there wont be such a thing as a US currency. however, this is the only time i think the government should really get involved. they should heavily regulate so that depositors are protected. this to an extent occurs, but i think the sup-prime whatsit showed how effective they are. i have to wonder how much of that was backed by depositors. i guess a lot was backed by ppl buying those mortgage backed securities issued by fannie/freddie. i dont know enough to know how there system works to really know. i should look into it at lunch time.

    as for failing mortgages, this also should not be supported by government.
    really, i dont think government should do much at all. a few months ago everyone thought the US was in the clear, and now everyone is wondering how bad the recession will be. there ya go. the “taxpayers” as they are were warn well and truly about this. since 2001 the hiccups in the market should have made it blatantly obvious they werent on solid ground. i just can’t get over some ppl’s logic, they have this information, any type of sense should tell them they probably cant afford the level of debt they are trying to sustain (i guess many ppl use the logic that everyone else has this level of debt, why not me…), true it was the finance system that is hell bent on getting every ounce of profit it can out of a financial system absolutely full of ppl pushing the regulations to get as much money as they can. (on that note, the banning of short selling, i thought was kinda ridiculous. like short selling was the source of all probelms…) but thats the way things are. so i guess we will wait to find out what happens.

    ppl were warned forever about house prices being overinflated. and now ppl like me can do the whole “i told you so” about the pitfalls of purchasing houses the past few years.

    why is the government responsible for the economy anyway? I know it’s universally accepted that that’s the case – but why is it so? Why aren’t businesses and industries responsible for the economy? Why is the government blamed when it tanks but ignored while companies take the credit when it grows?

    the government is responsible for the economy to an extent. I think it does have a role in managing the monetary system, its fiscal decisions have a major impact on the markets. it is required to regulate the financial system (cause well the current situatoin is a fine example of how the financial system can’t regulate itself). unfortunantely i guess the government isnt exactly superb at regulating a market that in good times has public opinion and the insttitutions all against them, and in bad times there isnt really a lot they can do.

    as for being responsible the economy is always strong, i dont htink the government needs to be responsible for this. current social policy makes it difficult for the government to be anywhere. IR reform was a step forward for strengthening the economy and making it more robust, but it got shut down. without IR reform, any recession in australia is going to be exasperated (spelling?). make the labour market less robust, economic downturn, its not going to result in more ppl staying in jobs. and not going to make ppl want to hire. go figure. but yeh, i think the government should have responsible policy that is economically minded, and is such that businesses/inductries/markets are operating in an environment that does sustain the economy.

    next up, i dont know if business and industries should be responsible for the economy. to an extent, they are a component of the economy, but i dont htink “responsible” is what they should be.

    who would be an executive of a global company now when a failure leads to mass losses – perhaps that’s why the salaries and payments are so high…
    whose idea were NINJA loans (no income no job)? whose idea was it to call them that? Where did the “A” in the acronym come from?

    the finance industry is very cut throat. either you perform up there with the best companies (which means getting every dollar, and having to do all these crazy-fandangle finance tricks, which while risky, everyone else does them so you have to do them. the guy playing it safe and lagging behind get
    fired) or you dont exist. i dont actually know where the ninja loans came from, and im not sure exactly how prevalent they really are. from my experience, americans whinging is generally means they have had it better but it now costs more money for gas. a lot of them arent really that bad off. to those young families that bought houses they cant afford, a lot probably got suckerde in by the low interest rate environement, whcih itself was due to a flailing economy. the economy didnt kick start, they lost out. interest rates arent even that high. again, you have to ask if they were open to being hit that hard by interest rates, what were they thinking. sure, it was also backed by a lot of job losses, but again nothing not that should have been forseen or atleast considered.

    why would congress pass a bill that the majority of the public think is a bad idea? who does this decision benefit politically?

    well, i guess with hindsight they wouldnt. go congress. makes the government look busy though i guess. ppl always want to government to do something.

    i think the bigger issue is the health system. i still cant get over this guy from last year. i went to this seminar thing on the health system, and he got up and said there was no “health crisis”. he basically spoke for 40 minutes arguing over a technicality, that the current health system couldnt be defined as a “crisis”.

    but anyway, this was poor government foresight. i so hope the qld labour party dies next election. actually just state governments in general.
    federal really should take over health. and infrastructure. im okay wiht states having educaiton. really, we only need three ministers in the queensland government. the minister for education, the treasurer, and the minister for women and children (margaret keech).

Comments are closed.