I am not an economist, nor do I play one on TV, but I do for the purposes of this blog. Let’s look some of the steps that got us to this point, where the Dow Jones has dropped 7300 points[A] in the last year and a half, and have spent $2.2 TRILLION[B] so far.
In this post I’m just going to concentrate on the government’s efforts. I’ll go into my opinions on other facets later (banks, mortgages, etc).
First, we had the Bush Administration’s Stimulus Act[C].
You remember this one, where you got a check in the mail that was supposed to stimulate the economy. the problem with that, is that a) people really didn’t get enough to spend to affect the economy in a significant way in the first place, B) some used that money to pay bills that were due for previous months (back rent/phone/electric bills) and C) if enough money WERE given out to significantly stimulate the economy, it would have a DEVASTATING effect in the future, as inflation[D] would have gone through the roof… the money that you have saved away wouldn’t be as valuable as it is today, because the government just flooded the market with much more money. Not only that, but GWB spent so much time in the ‘War on Terror’, that he COMPLETELY forgot about taking care of domestic issues FIRST!!!
(Warning: You are about to enter a ‘spleen venting zone’ Any and all spleen venting and frustration is approved by … me… (who the hell else would it be, eh? Hoser?)
By the way, ‘Terror’ – per the Merriam Webster dictionary is
1: a state of intense fear
2 a: one that inspires fear : scourge b: a frightening aspect c: a cause of anxiety : worry d: an appalling person or thing ; especially : brat
3: reign of terror
4: violent or destructive acts (as bombing) committed by groups in order to intimidate a population or government into granting their demands [E]
So he A) declared war which under the constitution, he can’t do… only Congress can declare a war[F] B) tried to declare war on a concept, not an actual country and C) actually became a perpetrator of the very thing that he illegally declared war on, by torturing POWs[G], invading countries with no justification/a completely false premise[H] and violating civil liberties and human rights that this country thrives on and is based on(see: Act, Patriot[I])… but I digress)
It was under his administration’s watch that the most ridiculous banking practices that the nation has seen occurred. HIS administration eliminated the ‘uptick rule[J]‘. This elimination gives investors INCENTIVE to drive the price of a stock down by selling short with no restrictions.
I know this is a long post, so I’ll go on in future posts.
[A] Yahoo! Finance
[B] CNN Money – Bailout Scorecard
[C] Wikipedia – Economic Stimulus Act of 2008
[D] The Concise Encyclopedia of Economics – Lawerence H. White
[E] The Merriam-Webster Dictionary
[F] The United States Constitution
[G] CNN Politics
[H] CNN Politics
[I] Wikipedia – Patriot Act
[J] Wikipedia – Uptick Rule