Over the past week, I’ve often wondered why the financial crisis has been positioned as a Wall Street problem requiring a Wall Street bailout. There are trickle down effects that impact all Americans. We’re seeing it here in Central Florida. And, talking to some well informed community leaders, we’re going to see even more problems. Businesses already struggling are going to face even more problems. Think about it just from a real estate perspective. Say Developer A was going to build a new high rise. But, thier credit line all of a sudden was greatly diminished — so much so that they’ve decided to delay the project. That means the architects, planners, general contractors, cleaning crews, sales teams and lots more people suddenly don’t have work. Which means they can’t go out to eat as much, have to fire the cleaning lady and won’t shop. Stores won’t be busy, so the kids making minimum wage will be layed off as well. You see where I’m going — it’s a viscious cycle. It may start on Wall Street … but the crisis is quickly finding its way to Main Street.
When speaking about the bailout bill in the Senate this evening, Obama correctly portrayed this as an American Crisis … not just a Wall Street crisis. I hope people will understand that this bailout isn’t just to help protect the rich people. It’s about trying to find a way to stop the bleeding so the American people are protected. From Obama (transcript courtesy of Daily Kos):
When the House of Representatives failed to act on Monday, we saw the single largest decline in the stock market in two decades. Over $1 trillion of wealth was lost by the time the markets closed. And it wasn’t just the wealth a few CEOs or Wall Street executives. The 401(k)s and retirement accounts of millions became smaller. The state pension funds of teachers and government employees lost billions upon billions of dollars. Hard-working Americans who invested their nest egg to watch it grow saw it diminish and in some cases disappear. And while that decline was devastating, the consequences of the credit crisis that caused it will be even worse if we do not act now. We’re in a very dangerous situation where financial institutions across this country are afraid to lend money. And if all that meant was the failure of a few banks in New York, that would be one thing. But that’s not what it means. What it means is, if we don’t act, it will be harder for Americans to get a mortgage for their home or loans they need to buy a car or send their children to college. What it means is that businesses won’t be able to get the loans they need to open a new factory or make payroll for their workers. And if they can’t make payroll on Friday, then workers are laid off on Monday. And if workers are laid off on Monday, then they can’t pay their bills or pay back their loans to somebody else. And it will go on and on and on, rippling through the entire economy. Potentially we could see thousands of businesses close, millions of jobs could be lost, and a long and painful recession could follow. In other words, this is not just a Wall Street crisis, it’s an American crisis.