There has been a surge of illogical fear and widespread panic regarding Monday’s stock market decline. Despite the apocalyptic noise emanating from certain newspapers and TV stations, the market’s decline is not a catastrophe.
Yes, a fall of 777 Dow points is not good, of course, but let’s take a closer look at what happened before declaring that the world is ending. Last week, the stock market was falling sharply as banks were failing and economic indicators suggested that a recession had begun.
The government announced that it was going to do something, anything, to try to prop things up. The result: a bill giving Treasury Secretary Henry Paulson dictatorial powers to spend a $700 billion blank check. The market, getting its fix of government assistance, catapulted higher.
However, once Congress looked at the bill, it wisely voted it down; while cosmetic changes were made to the bill, you can’t put lipstick on a pig – this bailout was still a travesty.
The market was already dropping sharply this morning before the bailout was voted on, trying to scare the Congress into voting for the bill. As soon as the bailout was defeated, the Wall Street elites threw a temper tantrum and starting selling stocks furiously.
We, the taxpayers, won a clear victory Monday. Instead of giving away $700 billion of our tax dollars to the rich, we kept them for ourselves. Who suffered? The rich who have been sucking the financial system dry with their manipulations for years.
The media, sadly, is filled with people who feel sympathy for fat cats who won’t be able to buy a bigger yacht for next summer’s sailing season. The media is trying to make this look like a defeat for everyday Americans, even though the vast majority of stock is owned by the extremely rich.
I don’t hate rich people, but it is deeply immoral that they feel entitled to steal our tax dollars to prop up the value of their stocks. The wealthy Americans who made bad investing decisions have no right to foist the tab on us; we live in a capitalist society, if you invest in a dud, you lose.
The people who pushed this bailout want to have a nation where they get to keep profits but socialize their losses onto us.
The proponents have thrown out a red herring that this bailout would actually have saved the economy. This is so ludicrous as to hardly be worth refuting; the rich hoped you would be gullible enough to gladly give them your tax money without a fight.
The bailout would have covered less than five percent of the nation’s debt, and it wouldn’t have saved any of the struggling banks. The banks that are struggling made lousy loans and were terribly run businesses; capitalism kills the weak.
We have plenty of banks in America, while losing Washington Mutual and Wachovia is scary, in the long run, it is irrelevant.
Stocks will go up and stocks will go down, giving Wall Street’s elite a trillion dollars every time stocks drop is a good recipe for bankrupting the government.
One of the biggest shills for this bailout, Warren Buffet, suffered greatly yesterday. His company, Berkshire and Hathaway, made a misguided bet on our currency to plummet and on American stocks to rise. Instead, stocks fell and the dollar gained value; his lobbying had fallen on deaf ears.
He tried to intimidate Congress — threatening them by saying Congress would cause an “economic pearl harbor,” should they fail to act. Time to grow up, Warren, the sun still rose this morning, the banks are still open and our ATM’s still work. America doesn’t need to launch a war on her taxpayers just because your foolish bets cost you dearly.
Ian Bezek is a junior economics major. His column appears Tuesdays in the Collegian. Letters and feedback can be sent to firstname.lastname@example.org.