Many sectors of the public grudgingly supported the federal government’s bailout plan for financial institutions after repeated warnings from top-level officials that it was do-or-die for investors.
So Congress passed the measure supported by $700 billion from taxpayers, and many naively hoped that the problem would go “poof.” It didn’t, and now there is more dire financial news.
Federal Reserve Chairman Ben Bernanke painted a gloomy portrait of the economy Tuesday as creditors remained hesitant to lend. In so many words, Bernanke said the nation has a serious case of financial constipation.
President Bush promises the bailout laxative will work — eventually.
“We’re going to get through this,” the president said Tuesday during a speech in a Washington suburb. “Have faith, the economy is going to recover over time. I wish I could snap my fingers and make what happened stop. But that’s not the way it works.”
It’s sure not working so far. The Dow Jones industrial average was down a record 800 points at one juncture Monday and closed the day below 10,000 for the first time since 1994. In Tuesday afternoon trading, the three major U.S. stock indexes were down more than 3 percent.
The market, no doubt, will rebound as savvy investors snap up undervalued stocks. A longer term rebound could result if the Fed cuts its key interest rates this month as has been proposed.
While the bailout package may yet work, as Bush promises, and federal interest rate adjustments can be effective when used judiciously, they are simply Band-Aid solutions to the real problems plaguing Wall Street — a lack of federal control over destructive practices such as sub-prime lending.
Until such consistent control is gained, strap yourself in because the runaway Wall Street Roller Coaster will continue to hit the valleys at breakneck speed.
Opinion
EDITORIAL: Credit constipation requires long-term market control
- Opinion
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Editorial: If bullying tale is true, APA right to release headmaster
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Viewpoint: Medical professionals instill confidence
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Letter: Impatient drivers ignore school bus arm
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Maureen Hayden: Readers weigh in on low voter turnout
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You Said It: About fundraiser, missing woman, building preservation
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Scott Underwood: Help us with book about local athletes
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Editorial: Memorial Day helps put face on wounded warriors
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Editorial: Honor those who fought, and celebrate our freedom
This weekend, keep in mind the reason for Memorial Day — to remember those who have been so important in our lives, especially those who made the supreme sacrifice in military service.
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Editorial: If bullying tale is true, APA right to release headmaster
