Bailout triggers an earful of anger
Kai Ryssdal is in Cleveland, Ohio, where he sat in on a radio talk show that fielded calls from listeners about the federal bailout plan. Their anger came through loud and clear.
People rally in the financial district against the proposed government buyout of financial firms on Sept. 25, 2008, in New York City. In response to the global financial crisis, dozens of protesters, from a variety of activist groups, denounced the capitalist system, Wall Street and the Bush administration. (Spencer Platt/Getty Images)
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People rally in the financial district against the proposed government bailout of financial firms on Sept. 25, 2008 in New York City. In response to the global financial crisis, dozens of protesters, from a variety of activist groups, denounced the capitalist system, Wall Street and the Bush administration.
TEXT OF STORY
KAI RYSSDAL: As you know, if you caught it up at the top of the broadcast, I'm in Cleveland today at WCPN. As you might also know, Cleveland's in the unfortunate position of having a whole lot of foreclosed properties in and around its city limits.
Northeast Ohio's been feeling the pressure of a sliding economy for a good couple of years now. So when people hear the government wants to spend $700 billion to rescue -- as they see it -- a bunch of big banks that made some bad decisions, they're angry. And when you get them on the phone the anger comes through loud and clear.
I sat in this morning on the local talk show here -- "The Sound of Ideas" it's called -- hosted by Dan Moulthrop.
DAN MOULTHROP: Gary's with us now from Lakewood . . . Hey, Gary.
GARY: Thanks for taking my call. You mentioned that there was a problem with the way they rolled this out, and I couldn't agree more. They rolled it out as The $700 Billion Bailout. There were never any other alternatives put on the table first, or even saying, "We really need to talk about this as a nation." We've been put in panic mode again. And we've been burnt in panic mode twice. We got burned after 9/11 with the Patriot Act being passed -- that basically shredded the Constitution; and we got burned in the lead-up up to the Iraq War with WMDs. I think they have a crisis of trust. We're in panic mode and we do not believe them.
Trust, of course, is the problem here. The banks don't trust each other. And because they haven't really been told what's going on, people don't trust the government.
MOULTHROP: Joining us now from Eastlake . . . Alicia, good morning.
ALICIA: Yeah, I just, you know, I just hope that all these things are . . . whenever they come to a final determination, are explained to the American public.
RYSSDAL: And that's what I'm saying, right.
MOULTHROP: Exactly, Alicia.
ALICIA: I find this very frustrating. And then I think that some of these financial instruments that are being put out there are so complplicated that the average consumer doesn't even understand it and Wall Street giants don't even understand it. The impact of it, I think that somewhere down the line thing have got to be simplified so that everybody knows where we're at and we are all on the same page.
MOULTHROP: Alicia, thank you, very much.
Now to Elaine, from here in Cleveland.
ELAINE: Well, I have a pretty simple question for both of you. And this has to do with the definition of the so-called crisis. What I want to know is why this crisis is being called the crisis for the American people. The crisis for us all. Why are you, who are the political/economic commentators, talking about this in such a universal way, and not talking about it in terms of the very specific group of people who have made billions of dollars on this greedy and rapacious appetite having to do with the economy?
I'm going to tell you what I told Elaine this morning -- that there is a universality. That what happens at the highest levels of finance, among those big Wall Street banks we keep telling you about, that does affect your car loan and my credit and your neighbor's mortgage.
Because if they're not lending to each other because they don't know how much bad debt is on a borrower's books, then your auto finance company, and my credit card company, and the bank that holds your neighbor's mortgage, won't have enough cash to keep on lending. What the government's trying to do -- and there are a lot of other ideas out there, and a bailout may or it may not be the best plan -- but what it's trying to do is unload that bad debt to get the trust -- and, eventually, the money -- flowing again.
Comments
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From Vallejo, CA, 10/05/2008
"Today, there are tears in our Lady's eyes, looking at our nations vast compromise...."
From Washington, DC, 09/27/2008
Mr. Ryssdal,
Yes, there is a universality. And, yes, I realize the name of the show is "Marketplace". But the investment banking system is not the only factor in the economy that touches all Americans. The banking system has no monopoly in this aspect.
We have a problem. And this bailout is the most crude, non-transparent and unaccountable way of addressing it.
Finally, why isn't there any explanation on Marketplace about why a tight credit market wouldn't eventually rewards savers with higher returns? This is the kind of analysis I appreciate from your show.
09/26/2008
Given recent reports on US and foreign corporations avoiding taxes and CEO's low tax rate (recall Warren Buffet's challenge to CEOs to pay taxes at the same rate as their secretaries), I'd like to know how much in taxes businesses likely to be bailed out have paid in the last five years. That will help us understand the return on our $700 bil. investment.
From Goose Creek, SC, 09/26/2008
First, even with the "Bail Out" plan I do not believe it should come as one big bundled of money and even with fees and interest paid by these financial institutions it would still take years for the people to see a return on there money. Second point, $700billion could have paid every bad mortgage; I know hinesight is 20/20 but, we could have paid every foreclosure with that. Lastly, since there is no need to complain without a solution I prepose we 1. put the Glass-Segal act back in place since it was made for occasions such as this; 2. pratice what we preac and become more transparent to other and emerging economies as we ask of them and; 3. let these invesment banks and even AIG sell off all the assets it can first then give funds as needed. I understand it's not just us but other people even countries at stake that's why there are CEO's and congressmen alike that should go to jail. We want to fix in a couple weeks what it took 30yrs of greedy CEO's and politicians on both sides to create. It just can't happen.
09/25/2008
Dear Kai,
I have been listneing to your show for quite some time and I have great respect for your journalistic ethnics. But on this one occasion you have definitely crossed the line. You flatly stated "What the government's trying to do...is uload that bad debt...". To be correct this is only what the government's claiming. I do not trust the government or wall street. I do not take them at their word. For all we know, and for all you know, officials in the government may actually be attempting to steal money from the treasury and funnel it to their friends and insiders in the banking industry. Why else would they be fighting so hard against oversight and caping CEO pay? Shame on you for being gullible and sounding lke a shill.
From Whittier, CA, 09/25/2008
The only thing that the caller "Gary" missed was that the Wall Street bankers and their political hacks should be lose ALL of their assets and be publically whipped and flayed. Not one dime for a bailout.
I found it interesting that I have personally thrown out at least offers to refinance my mortgage this week, and my neighbor (a former Lehman employee) just bought a second home - closing on Tuesday. Maybe it is time to NOT live on credit - like our grandparents did!
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