Rescue or Bailout?

Hope is the expectation that something outside of ourselves, something or someone external, is going to come to our rescue and we will live happily ever after.” — Dr. Robert Anthony

Hi Persuader,

Seven hundred billion (plus) dollars. How did they end up selling it? Well, there was fear. There was scarcity. There was impending doom. And it lead to panic and more fear and more doom. They said if it didn’t happen, surely we’d be ruined. They called it a bailout (about which you can find more info here) and when the public outcry was so strong that the house refused to pass it, they switched it to a rescue plan.

White House spokesman Tony Fratto told journalists who had been using the term (as were we all) “bailout” to describe the $700 billion package. “It’s really unfortunate shorthand for a very complicated issue.” The White House prefers the word “rescue.”

Those in charge believed that they would be in a better situation if this were known as a “rescue” rather than a “bailout.” Bailout sounds terrible. Rescue is safe. It gives you a warm feeling — like coming to while on the operating table.

And then Senator McCain got on the framing bandwagon and said, “Well I think what happened is we didn’t convince enough Republicans and Democrats…that this was a rescue package and not a bailout.” Convincing and persuasion was in order because face value wasn’t good enough.

I watched a bit of the CSPAN, the CNN, the FOX, the MSNBC, all on this page, while this was going down, as much as I could handle, and mainly from the perspective of, who’s being more persuasive in this deal. (CSPAN wins because they have no pundits at all.)

Problem is, this is so complicated that you have to be an economist or financial advisor or banking expert to understand it. It’s enough to make the common man’s eyes gloss over except for the fact that the taxpayer wasn’t having it because it was coming out of their pocket.

And now that there’s been a “rescue” (not that we the people have been rescued, but that big banks and such have been rescued), it seems like it’s not gotten any easier to understand.

The frame stuck, however, that this had to happen. The frame was that if it didn’t happen, the world would crumble starting with “Main Street”. The frame was that there was no way for the market to correct itself. The frame was that socializing the banks (in my opinion this is a form of socialism), was the only way for us not to head into a tailspin.

The real problem isn’t in the framing of this. The real problem isn’t the persuasiveness or lack thereof of the parties involved. The problem with this plan is not that it has been improperly spun. The real problem is that it won’t fix the crisis.

Until Next Time,

Kenrick E. Cleveland

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C T Vivian - October 30, 2008

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See our posting policy. Comments are welcome, even if you disagree, as long as it is kept civil and contributes to the conversation. Personal insults, offensive language, and general flaming will not be allowed.

Loren Woirhaye - October 30, 2008

Wow C.T. – you are one angry, weird-acting person.

I’m guessing you may be panicking over the election your favorite candidate is about to lose. Losing sucks. Better luck next time to you.

Mike Sawisky - October 30, 2008

[quote comment=""]Wow C.T. – you are one angry, weird-acting person.

I’m guessing you may be panicking over the election your favorite candidate is about to lose. Losing sucks. Better luck next time to you.[/quote]

I am on Kenrick’s Point Of View. By a simple Reframe, the shift clicks in and voila, it doesn’t sound like it’s a problem anymore. However I wonder what crisis needs to be fixed here? And is crisis for one, opprtunity for others? Certainly the arguement could be made that the government actions are taking them where they shouldn’t be, that is, if we wish to remain in a free market system. Thanks for challenging us KC!

Doug Eberhardt - October 30, 2008

Brilliant observation Kenrick!

I was a financial adviser for over 20 years. I left the business 3 1/2 years ago to write a book to expose what I viewed as the flaws in the industry. This book has now evolved into three to resolve bigger issues that confront the U.S., but your conclusion that “The real problem is that it won’t fix the crisis” is spot on. It’s like pouring gasoline on the fire or giving a heroin addict another hit.

It is indeed fear that the government is peddling. It is indeed a form of Marxist socialism. Plank #5: “Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.”

Is this not what they did with Goldman Sachs and J.P. Morgan? What about Fannie and Freddie? The list goes on and it won’t stop there.

In reality it is both the left and the right that are taking this country down a socialistic path. It will be difficult to overcome this new wave of socializing to the tune of over a trillion dollars that they have put upon us.

With over 10 trillion of current debt, the U.S. is heading down a slippery slope as eventually the dollar will head back below 80 and towards self implosion.

Look at the analysis I did comparing the economic data of Iceland and the U.S. here: http://youcanmakeadifference.org/fedup/archives/31

Iceland had better economic data than the U.S. in 2007 and only 1% unemployment and a trade surplus yet their currency called the Krona lost 75% this year and their stock market lost 77% with interest rates currently at 18%. This is the future of the U.S. It’s a matter of “when,” not “if.”

But you can trust the government to keep trying to print more money to bail us out, erm, excuse me, “rescue” the Americans. But how long can this game continue with a balance sheet your financial adviser would have you short? If Americans don’t know any better, who is going to tell them they’re getting a raw deal? Americans are the ones thinking that Treasuries are a good, safe investment!

Hopefully my books will be out soon enough to warn them. This isn’t going to end well. How can it when congress never stops spending and the Fed never stops the printing press? Where’s the checks and balances the Bible speaks of? It will soon change from “We The People,” to “We The Serfs!” (yes…I have that website too…for future use!)….

Peace and keep up the good writing!

Doug Eberhardt - October 30, 2008

I misspelled my website in the last post so when you click on my name there it won’t take you to it, lol.

Click on my name in this post (above) and it should take you to my latest writings. I wrote about what was coming in a February post on my blog here: http://youcanmakeadifference.org/fedup/archives/5

Mark - October 30, 2008

For the last 8 weeks the Fed has been printing money at the rate of 130% per year. A banana repblic with no bananas! Our planes are late, the postal service is a wreck, and our politicians are on the take. Oh yeah and debt up the wazoo. Default is inevitable…


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