with Sara and Veronica
We're two moms with different backgrounds, jobs and points of view, writing about our opinions on the political and social issues affecting working moms. We'll also keep our eye on the media and the celebrity mom world to highlight issues that are relevant to your life.
Check out our personal blogs: Veronica's Blog and Sara's Blog
Despite my best intentions, I still don’t understand most of the things that make our economy run or stammer. When I finally took an economics course in graduate school I made my lecturer crazy because I kept questioning the reality that are economic models – which aren’t based in reality, but theory. Theory says that when demand goes up, supply goes down and price should go up. Oil usually follows this, but organic foods don’t really follow.
The past few months and especially this past week has been almost impossible to follow for the average person. Banks are failing, someone who spent only 17 days on a job gets $11M in severance, and thousands of families lose their homes each day. The US Congress is on the verge of passing a GINORMOUS bailout package for Wall Street. The talking heads from Wall Street keep saying that we, the regular person, must go along or we’ll end up in a depression.
But I can’t seem to find any sympathy or logic in spending $700B on the banking industry when we allow the President to veto a $10B increase in children’s health insurance.
But I’m trying. I really am trying to see that perhaps us average Janes will benefit from this strategy. Lynn Sweet of the Chicago Sun-Times posted a summary of the package and these points stood out to me:
• Section 103. Considerations.
In using authority under this Act, the Treasury Secretary is required to take a number of considerations into account, including the interests of taxpayers, minimizing the impact on the national debt, providing stability to the financial markets, preserving homeownership, the needs of all financial institutions regardless of size or other characteristics, and the needs of local communities.
• Section 110. Assistance to Homeowners.
Requires federal entities that hold mortgages and mortgage-backed securities, including the Federal Housing Finance Agency, the FDIC, and the Federal Reserve to develop plans to minimize foreclosures. Requires federal entities to work with servicers to encourage loan modifications, considering net present value to the taxpayer.
• Section 124. Hope for Homeowners Amendments.
Strengthens the Hope for Homeowners program to increase eligibility and improve the tools available to prevent foreclosures.
Speaker Pelosi adds:
III. Taxpayer Protection
Taxpayers should not be expected to pay for Wall Street’s mistakes. The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program. The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program by charging a small, broad-based fee on all financial institutions.
Of course I have no idea who is in charge of policing the banking system other than the people who allowed this crisis to happen in the first place. I haven’t been satisfied with either Presidential campaign’s reaction to the crisis. McCain’s freak out was just laughable. Yet Obama’s soft stance is scary.
Will there be a moratorium on foreclosures? Will judges have the authority to allow homeowners to renegotiate their mortgages and keep their homes? Will someone finally address how credit card companies go after college students?
Yes, I think this is corporate welfare. As someone who is aghast that in the best country in the world we have homeless veterans, hungry children, and single moms who have to choose between paying the rent and leaving their children in unsafe caregiving conditions…I’m disgusted. But I’m open to one of you explaining it to me and anyone else who is just as confused and/or disgusted.
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