By allowing big Wall Street investment banks to fail (or at least, assist in their liquidation/cut-rate mergers), the federal government is:
-Sending a signal that large investment banks should be more vigilant about the types of investments they make.
-Thus forcing smaller banks/real estate firms/insurance companies to be less willing to grant mortgages for houses people cannot afford.
-Thus forcing a change in behavior by millions of Sam and Sally Homeowners who have spent well beyond their means in the last 10 years, and causing them to forclose on their dream McMansion in the suburbs.
-Thus forcing Americans to cut back on their spending and their lifestyle.
And making average people like me (who, I thought, was investing responsibly) lose 50% of their retirement savings in the process. Here's how I've done over the past 3 days.
But, taking a bath once in a while is healthy, right?
Seriously, I honestly think this correction/crash/recession is a good thing. Despite a lot of short term pain, it will force us as Americans to live a more balanced, sustainable lifestyle. Remember all those stories of your grandma saving and reusing scraps of tinfoil during the Great Depression? Yeah, that.
It's kind of fun if you forget about how much of your savings you're losing and all the people that are going to be out of jobs.
The government should be bailing THEM out, not the wall street types.
In other news,
This song from The Black Keys seems appropriate for today.
Kings and sons of god
Traveled on their way from here
Calmin restless mobs
easing all of their, all of their fear
The statue in the square
meant so much when it first stodd
people come from far and near
bless them if, bless them if it would
Sadie, dry your tears
I will be the one
to pull you through the mere
before you come, before you come undone