The Bailout: A Roll of the Dice?

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The Bailout: A Roll of the Dice?

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by CODY LYON

EXCERPT...

This past week, as it became increasingly clear that an infusion of $700 billion in taxpayer capital might be necessary to stave off national economic "calamity", a number of Americans expressed increased feelings of doubt, confusion and frustration.

In fact, according to a "Bloomberg/Los Angeles Times" Sept 19-22 poll, by a margin of 55 to 31 percent, "Americans say it's not the government's responsibility to bail out private companies with taxpayer dollars, even if their collapse could damage the economy."

Even in New York City, the home Wall Street of Wall Street Giants, talk on the streets, bars and boutiques beyond the cavernous streets downtown is mixed with worry and anger.

"I do not believe the American taxpayer should have to bail out another business like Bear Stearns" said Scott Woodward, CEO of Sewbranded, a marketing and branding firm in New York.

"My inclination is to let it play itself out naturally, and maybe the goings on of Wall Street as we knew it, will halt the greed and corruption of how CEO's run firms for short term personal gain will subside," said Woodward.

In his initial appearance before lawmakers in Washington, Secretary of the Treasury Henry Paulson urged that the bailout plan, as it's commonly called, be passed "quickly and clearly" and that inaction could lead to a "recession."

President Bush used similar language during a number of television appearances.

Despite acknowledging the use of shrill language, a number of experts appear to believe that the doing nothing is simply not an option.

"The use of recession sounds to me like a scare tactic," said David Backus, Heinz Riehl Professor of International Economics and Finance at New York University's (NYU) Stern School of Business.

But Backus says that a "reasonably rapid response to problems in the financial sector are important."

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