Here’s a depressing way to end the evening.
The Wall Street Journal is pessimistic after today’s vote. So am I.

Both he [Bernanke] and Paulson gave the politicians and Main Street too much credit. They have behaved too calmly, and too rationally for the nation to get the message.

Bernanke and Paulson should have made outrageous promises at the hearings and argued there is no way this will cost the taxpayer $700 billion, that the taxpayer will in fact make money. That works much better on the American psyche. America loves buying lottery tickets. Think of the bailout as a lottery ticket with much better odds.

Perhaps the greater failure by Bernanke, Paulson and President Bush was a reluctance to scare the hell out of people. A leader shows gravitas and concern, not panic. But, perhaps, a little panic wouldn’t hurt. Because you get the sense that Main Street is so busy being angry, that it isn’t sufficiently frightened. The public still doesn’t connect their lives to the crisis. But it should.

Because no bailout bill means that:

By the close of the stock market on Monday, the value of Main Street’s IRAs, 401Ks and pension plans will be worth a lot less than on Friday. How much? Hard to say, but a loss of 20% isn’t crazy.

By week’s end, there is a good chance that a raft of large banks will be taken over by federal regulators.

Within two weeks, as the banks hoard cash, the credit lines on most of Main Street’s credit cards will be reduced, foreclosure proceedings accelerated and car-leasing programs suspended.

Within a month, Main Street won’t be able to buy a home, a car or a tractor unless paid for in cash. As the credit markets shutdown, the mortgage, auto and small-business loan markets will nearly disappear. And the economy will grind to a near halt.

Far fetched? Not at all. It is the absence of credit–not too much of it–that causes great economic depressions.

Okay,that’s too gloomy to end with. Try this sober but ultimately reassuring article by another WSJ columnist.

5 Comments

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  1. Anonymous

    It seems like Pelosi really is going to have to answer for what she did today. What do you think? I mean, here she is asking congress to vote on this stinking bill and then she spews anti-Bush rhetoric at these republicans who need to be coddled, not lectured. She’s almost as dumb as Palin.

  2. Chris Fountain

    No one’s covering themselves in glory down there, that’s for sure.

  3. Anonymous

    but don’t these republicans get it (I know lots of Dems voted no too, but their master plan involves more government, not less)? What did they accomplish today? Now the market is tanking, real Americans will be hurt, and McCain has no grasp of any economic issue (not that Obama is Adam Smith, but at least he hasn’t voted against more regulation and oversight for the last 26 years) and for what? To stick to their principles that we should have less government not more? How short-sighted is that? Guess what, if the government doesn’t step in, who will? China? Steve Cohen? The economy is in trouble and what do we have to look forward to — Sarah Palin on Thursday night explaining how she can see Russia from her house. The republicans should thank God that election day isn’t this week.

  4. Anonymous

    Hey Chris, during the good old days 2000-06, did you ever steer a prospective buyer away from a property that based on their income, you thought they couldn’t afford even though the bank was willing to lend it? Just curious if you think realtors shoudl take some blame here.

  5. Anonymous

    i LOVE your website, but….there needs to be more pure-play coverage of greenwich real estate and less banter about stuff no one cares about…your site may be interesting, but i come here to see your review of homes you have seen or other information that will provide insight to buyers/sellers of homes…enough babble and more specific home value analysis or eommunity comparison…