I got word just now that the bailout proposal has been rejected by congress. I am elated. Federal funds should stop going to bailout private firms. They failed. I did not cause their failure. Neither did millions of other Americans.
Congress is just trying to cover their own stupidity. Since 1992 democrats have been pushing mortgage lenders to make high risk loans to the poor. Well guess what?! In a pinch, they can't afford them, and many of them were paying next to nothing anyway. We, as Americans need to think more about living within our means. If I cannot afford something I should not be able to buy it. But the government barged in and said credit scores don't matter, incomes don't matter, everyone DESERVES a loan. Well, we can see what happened following that mentality.
I am not holding the financial industry and mortgage lenders blameless, but it was DC that caused this problem, not NYC. NYC just exacerbated it on the false pretense that the housing bubble would never burst. Many saw this coming for years. Prices don't always go up, and debts have to be paid.
It's true, regulation is needed. We can't allow anymore high-risk loans. But, we must allow private firms to bailout the market, not the government. And short selling is not the problem. The idea that stopping short selling will help the market is asinine. Just enforce the laws on the books that call for transparency.