Is It Time to Hide the Money in the Mattress?

Lehman Brothers, unable to find a buyer or get a federal bailout, has declared bankruptcy; Merrill Lynch will be purchased by Bank of America; AIG is discussing options with potential buyers.  I woke up to these stories on NPR this morning.  More shoes to drop?  The Magic 8-Ball says “most likely”.  And also “outlook not so good”.

15 Responses to “Is It Time to Hide the Money in the Mattress?”

  1. Songbird says:

    I’m no longer sorry I cashed in the “Granddaddy Account” to pay tuition and buy a new car!

  2. Almod says:

    I am sorry to say that we might be feeling this stuff for years to come. And we may actually have to suck it up and bail out a few more of these guys just to keep our economy stable. I hate to think of it because I hate regulation in any form, but if we weren’t going to regulate before they started giving out these loans, then we’re paying the consequences of that now. There are too many people not involved in these sub-prime loans who are going to be hit with the ripple effect of this.

    At the same time, it literally sickens me that these institutions will not have to suffer the pain of their customers– who made no more or less of a mistake than these banks and will have a much harder time filing for bankruptcy as a direct result of legislation that these very same banks begged Congress to give them.

  3. Kathy says:

    I’m beginning to wish we had buried the “Granddaddy Account” in the back yard. Of course, if we had, our dogs would have dug it up and eaten it. :)

  4. Jonathan says:

    I’ve heard WaMu is next…

  5. Kathy says:

    At the same time, it literally sickens me that these institutions will not have to suffer the pain of their customers– who made no more or less of a mistake than these banks and will have a much harder time filing for bankruptcy as a direct result of legislation that these very same banks begged Congress to give them.

    Yep. I’d say many of the customers are less culpable, given they were taking advice from people who were supposed to be, advertised themselves to be, and had a responsibility to be, experts. “Let the buyer beware” only goes so far as an excuse.

  6. I believe that, to paraphrase the Second Amendment, a well-regulated financial system is necessary for a free state. Unfettered capitalism inevitably devolves into greed and hubris. Unfortunately, those of us who invested in hopes of a reasonable return end up with nothing while the big shots get their severance checks.

    And I would also like to give a shout-out to the state PACT Tuition program. By the time our kids were in third grade, their in-state tuition was paid for and guaranteed. At the time, I refused to use a mutual fund for college tuition because I was terrified that the day before I needed the money, the market would crash. I am looking remarkably prescient now, with a child heading for college in a couple of years.

  7. Katy says:

    Tell me again why I put that money in a retirement fund each month? Just kidding. But yikes. I guess this is a day when it pays to be a social worker. If you don’t have any money anyways, then you don’t have to worry about the stock market!

  8. Don says:

    To paraphrase James Carville a bit, it REALLY is the economy, folks. Unfortunately neither of the candidates for the presidency not their running mates has studied or understands economics and how the economic policies of our country affect every aspect of our lives and the other policies of our government. I was born during The Great Depression of the late 1920s and I will likely die during the Great Depression of the 1980s. I fear for the future of those who live through the next several years.

  9. Don says:

    TYPO CORRECTION: “not their running mates” in my prior comment should read “nor their running mates”.

  10. Kathy says:

    Don, I hope you don’t die during the Great Depression of the 1980s. That would mean you wouldn’t be here with us. :)

    I don’t know that any of the candidates who ran is a real expert on economic policy; that’s one of those areas where the choice of advisors is extremely important. I am concerned that McCain has some of the same people who did such a great job for GWB advising him. I think Phil Gramm is still hanging around even after his “nation of whiners” comment got him kicked off the official roster.

    Economic policy is always about striking a balance, and that is difficult to do when one can’t foresee the future. I think history has made clear — before the Great Depression and now — that (basically) unregulated markets lead to disaster. The devil in the details is how, and how much, to regulate.

  11. Don says:

    Kathy, have you forgotten that Congressman Ron Paul was a candidate for the GOP nomination for the presidency? Members of Congress on both sides of the aisle acknowledge his expertise on economic matters.

  12. Jonathan says:

    Guess his thoughts on people actually taking personal responsibility for their actions, complete free market and his desire for smaller government is what killed his chances.

    Funny, those are three reasons I loved him!

  13. Kathy says:

    Here’s the thing — a completely free market is a theoretical construct used to teach 100-level economics courses. It requires that all parties in a transaction have equal access to accurate information and that all share relatively equal power. When most people use the term “free market”, they mean no regulation of industry whatsoever. I don’t know about you, but I’m not interested in going back, for example, to the days of Upton Sinclair and patent medicine. Actually, using the example of food and drug safety, a well-run FDA would actually contribute significantly to a real free market in which consumers could make informed buying decisions and actually have recourse to identify and punish suppliers who sell useless or dangerous products.

  14. Don says:

    Following up my prior comments here:

    Congressman Ron Paul has studied economics.

    He was the only presidential candidate that I recall even mentioning economics in a substantial way during the time he was taking part in the GOP presidential debates. It’s regrettable, but his was an unheard voice crying in the wilderness. Everyone knows how his own party leaders either ignored him ….. or worse.

    Paul has been publicly writing and speaking about economics since 1996. Anyone can go to on his congressional website and scroll through articles he has written since then in his weekly “Texas Straight Talk” series, select, and read the various articles relating to economics. There are also a few videos available for viewing of Paul speaking about economic issues on on the top-right side of the page. In addition, about 8 years worth of his speeches and statements can be accessed on the “Speeches and Statements” page of the website at I think his “Something Big is Happening” speech on the HOR floor on 9 July, 2008 at is particularly interesting in view of what is taking place before our eyes today.

  15. Almod says:

    You are correct, Don. Ron Paul is likely the best person out there for our economy. However, I’m pretty convinced that what we’re seeing right now is a direct result of deregulation gone wild. That is to say, I don’t think that these guys need a ton of oversight… I just think they need a bit of babysitting to keep them from going nuts. I’m not so sure that Ron Paul would be too thrilled about any oversight for these knuckleheads. That’s my only concern.

    But yeah, I like Dr. Paul’s economic policy for the most part. I just wish the guy was still running.

Leave a Reply