A bailout of trust, not banks.

by Hunter Morrison

This evening the Senate passed a revised bailout plan, with questionable new riders attached to it.  These new provisions aim to help entice more House members to support the bill, hopefully pushing it to pass within the week.  Whether or not this strategy for gaining approval will work remains to be seen, as some of the newer additions, while possibly bringing some new Representatives on board, may alienate others that already approved the initial version of the bill.  Yet, despite the changes, perhaps the biggest problem still facing the bailout plan is how the general public perceives it–as a bailout for Wall Street fatcats at the expense of Joe Taxpayer.

This gut reaction is leading many Americans to strongly oppose the plan.  It is a natural feeling, the banks and related firms were put into this situation through their own greed, and now the middle class is being asked to bail them out.  Is giving them more money a really good idea?  Our money?  It’s easy to have a strong negative reaction to this, and some have even been driven to call up their local Representatives in Congress, which surely helped fuel Nay votes on both sides of the aisle earlier this week.

Opposition to the bailout is not only natural.  In this case, it’s also entirely correct.  For its stated purposes, the bailout is ridiculous.  Yet, if a strong American economy is desired, then a bailout simply must be passed.  This appears to be contradiction, but it is a result of the stakes of the current crisis being ill-defined.  The issue has been framed in terms of fixing the problems on Wall Street, and while the bailout does have a possibility of doing that, it is really more about restoring trust into the American economic system.

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