I usually don't post an entry from someone else's blog in its entirety, but this is simply too good, I have to make an exception. Contemplation of Preponderance is one of my favorite blogs to read, you really should check it out. This is a letter to Ben Bernanke, chairman of the Fed, on the recent bailout of Bear Stearns. And yes, it is a "bailout", I don't care what Bernanke says.
Dear Mr. Bernanke,
I've written several politicians and a few unelected officials, and now it's your turn. Please forgive me for not writing sooner. I think, perhaps, I could have helped. You have defended your decision regarding Bear Stearns and stated the action of the Feds was not a "bail out," but rather an action that had to occur to prevent the collapse of this huge financial presence. Your statement, as I read it in the news, indicates the entire economy would have been shaken if Bear Stearns had declared the bankruptcy that was imminent by the middle of March of this year. I realize I am not a math major, nor do I have a doctorate in economics, but . . . if Bear Stearns was at the point of bankruptcy and the stock value had plummeted from $60.00 a share to $2.00 a share, the fact of the matter regarding Bear Stearns is Bear Stearns became insolvent and unstable. Your response was a simple matter of printing more money to "strengthen" the weakened, nearly dead financial institution. The problem is, printing money and giving it to another financial entity to bail out the bankrupt bank, doesn't change the fact that the investment bank was bankrupt. And while we are discussing investments and rescue, please let me introduce you to the man on the street, not Wall Street, but simply the man that is trying to keep his investment called his home, and his stability called his job, and his security called a stable economy. Why does Bear Stearns merit so much more assistance to the tune of $250 billion? How many home mortgages would that amount of money helped save? Why do the tax payers have to keep working without hope of light at the end of the tunnel to fund the stability of Wall Street? Why, as an economist, can you not see that Wall Street has become a place of investing in money rather than investing in products or a stable economy? Wall Street is not funded to simply keep the economy in perpetual motion and you know, dropping the interest rates, and funding the big banks is nothing more than bringing the game of MONOPOLY to economic reality. The only difference Mr. Bernanke, between printing money for JP Chase & Morgan Co. to purchase Bear Stearns and counterfeiting, is the fact that you have been appointed to say it's legal to print money. The interest rates have plummeted, the value of the average American's investments have dropped dramatically, and you are not choosing to use the term "recession," while the rest of us are living the reality. The fact that you are not using the term "recession" makes me wonder one of two things. Are we already passed the point of recession and living the beginning of the "D" word, Depression . . . or are you simply out of touch with the common concerns and problems of the average American? Are you aware of the financial impact of filling a gas tank? Do you have any idea of the sticker shock, that continues weekly at the grocery store? Since you have spared Bear Stearns, to spare the rest of us, just when will that gracious decision to indirectly rescue the rest of us, by financing the purchase of Bear Stearns affect the average American in a positive economical way?
Thank you for your time and attention in this matter.
A good name is rather to be chosen than great riches, and loving favour rather than silver and gold. a Proverb of Holy Scripture