The Treasury Secretary, the head of the FTC, the Speaker of the House, the Senate Majority Leader, Republican presidential nominee John McCain, and Democratic presidential nominee Barack Hussein Obama all go to the White House to explain to President George W. Bush what has to be done in order to rescue the country from a complete financial collapse.
The solution is a massive bailout of historic proportions, they explain. The Senate and House will vote in favor of a $700 billion bill which the president must approve.
Sigh.
I'm torn about this. I learned the term "moral hazard" when it was being applied to the Korean economic crisis of 1997 and 1998, during which time a whole bunch of people said bailing out Korea would be encouraging irresponsible behavior in the future. Seems they were right, but with the wrong country.
Yeah, something must be done. After years of deregulation and negligence, the finance sector has the rest of the economy by the testicles. Hostages, we are. No choice but to pass this or they bring the entire economy down with them, a point punctuated by the 7% plunge in the stock market after the House failed to pass the bailout package the first time.
We're torn between wanting to solve this and wanting to punish the ones who caused it, and it seems we can't do both.
I'll blog more on this later.
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