Much of the public has been has been up in arms about saving Wall Street with taxpayer dollars and they've given members of Congress an earful.
That sense of outrage and skepticism was also evident on WCPN's call-in program, the Sound of Ideas® on Monday. ideastream's David Molpus reports.
With so many political leaders of both parties, so many government officials, business executives and economists warning that the sky would fall if the bailout didn't pass - and soon. - it is a shock to the system that a majority in the House of Representatives ignored the dire predictions.
That may be because they were listening to constituents like those who called the Sound of Ideas this morning.They are angry and many feel helpless that this fast-moving, out of whack economy is beyond their control - and maybe beyond the government's control too.
Sean: Like most taxpayers and people I'm just fed up,angry and disgusted. It's obvious the system has failed and will keep failing.
Fritz: There are gatekeepers, for example, Moodys and Standard and Poors. Basically, they said here go...
Molpus: These are the rating agencies for these financial instruments.
Fritz: Yea and this was absolutely garbage.
Fritz and Sean are both of Cleveland.
Other callers, like Norm, of Shaker Heights, are worried that the $700 billion bailout would just lead to more problems down the road.
Norm: With the tremendous deficit we have now, plus the monthly cost of the war, and now flooding the markets with another $700 billion, and maybe printing some of that money rather than borrowing it, doesn't that endanger the value of the dollar? Won't the dollar fall even further?
And Robert, of Brecksville, is not persuaded by those who say the government might get a lot of its money back once it starts selling the risky mortgages it had planned to buy up.
Robert: I've been looking at houses lately - bank owned houses - because I've been thinking about buying one. Ya' know what the banks do? They take these houses back, turn off the power, the basement floods because the sump pump isn't working and within two months the house is worthless. The government is going to buy a bunch of bad debt and when they go to try to liquidate these assets. They're going to find out they got a pig in a poke.
Even the local economists we had on the air to help explain the bailout needed to vent a little bit. Raj Aggarwal, Dean of the University of Akron's College of Business Administration, is particularly miffed at the way CEO pay often has virtually no relation to job performance.
Aggerwal: If things go well, you get huge bonuses and if things go sour, don't worry we won't take any money away. We've offered these kinds of choices to executives for at least 15 to 20 years and when you offer these kind of choices its called moral hazard. By rescuing these banks we are creating more moral hazard, so we have a huge problem in how we deal with it.
Aggerwal though said he supported the bailout bill. Like many others he warned that the credit markets would freeze up without it and that would bring the economy to a screeching halt. Without immediate action, Aggerwal says....
Aggerwal: Gosh, then we are in huge trouble and the $700 billion will be chump change compared to what it will take to fix it.
Keven Jacques, finance professor at Baldwin Wallace, agreed. After hearing this afternoon's news that the bailout bill went down to defeat, Jacques said: "It's like the government is driving a run-away car and they are driving it right off a cliff." I guess we'll find out.
David Molpus, 90.3