unmanaged wrote:
Seeking to dispel any impression that the bailout would amount to a rescue of greedy Wall Street executives by Main Street Americans, Mr. Paulson said the program “will cost Americans far less than the alternative.”
What alternative? He does not have one, that he can think of, so this is really a bail-out of people who should be in pound-you-in-the-ass prison...!!! So lets bail out the rich folks so they can keep their monies intact and continue to f&^% us, the average Joe, over again... I THINK NOT!
surely the alternative he means is to do nothing and watch the financial system collapse which leads to a 1930s style Depression and since the 1930s Depression led to WW2 and millions of dead surely that is a prospect to be avoided. The Wall Street Crash as Decius pointed out was a Liquidity crisis. The taxpayer is bailing out Wall Street because of the free market deregulation ideology practiced to an extent by both parties but principally the right. I think the bail out is essential but there will have to be some quid pro quo. There cannot be heads Wall Street wins tails the taxpayer foots the bill but that has to be sorted afterwards. If your parachute doesn't work you use your reserve rather than worry who packed the primary, why it didn't work, what went wrong etc. Inquiries and pointing the finger, recouping the losses to the taxpayer from the "rich folks" who are most obviously being saved (but as I said wouldn't be the principle victims in a repeat of the Wall Street Crash and the global economy crashing) from their own greed and ideology is a matter to be sorted after the fact. of course the other alternative he might mean although I'm reasonably sure he meant the former is to chase the spiral and save selective companies as the speculatators/hedge funds etc go after them and for the central banks around the world to keep pouring liquidity into the leaking bucket and hope the market bottoms out. Since "the toxic morgages" packaged as derivatives are causing the crises then surely taking them out of the equation is the simplest and, although phenomenally expensive, best course of action. 1 he could attempt to stop the spiral by dealing with the under laying cause -- as he is attempting to do by buying up those bloody derivatives 2 chase the spiral and save selected institutions like AIG because not as was said at the time they are players on Main Street but rather because the real trouble involved the insurance that its financial products unit offered investors for complex debt securities.
...
set off a devastating chain reaction through the financial system.
...
“Suddenly banks would be holding a lot of bondlike instruments that were no longer insured,” Mr. Sundaresan said. “They would have to mark them down. And when they marked them down, they would require more capital. And then they would have to go out and raise capital in these markets, which is very difficult.”
from here and thus save AIG to stop the spiral getting considerably worse whilst the world's central banks continue to feed liquidity into the system (which is also taxpayers money, although globally not just American money) but let the spiral continue and sort of regulate the spiral 3 do nothing like Andrew William Mellon Secretary of the Treasury from March 4, 1921 until February 12, 1932 arguing that this was a natural part of market functioning and "let's let the system return to normal. Let's liquidate banks; let's liquidate labor." those it seems to me are the alternatives | 
