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The Price of Delaying the Bailout September 30, 2008

Posted by sliceof in American Politics, Economics.
Tags: , , , ,

There are two types of people that are going to be DIRECTLY affected by the failing financial market.

1. People with much of their wealth invested in the market.  These people are going to suffer some loss, but as long as they don’t pull out of the market, they will be fine.  The market will go back up and their money will be there.  Their loss will end up being the loss of interest and gain on their investment.

2. People who lose their jobs.  Well, if workers in any sector are going to lose their jobs, the workers in the financial sector is probably the most apt to handle it
a. They already have incomes well over the cost of living.  Without a 300k job, they are going struggle making payments on pricey houses and cars, but it is highly unlikely that they are going to struggle to eat.
b. Most of those in the investment sector are well educated.  Other sectors of the economy will be able to absorb their skills much easier than if a toothpaste factory shut down.  Again, they may not be making the same quarter of a million they were making on wall street, but it is probably not going to be devastating.

Cut backs for people on Wall Street are going to be less Starbucks and switching from Taxi’s to the subway.   I pulled that directly from ths BBC interview in this post:

The Hardships of Being a Wall Street Employee

The extent of this market failure depends on the passing of a bailout.  Waiting a week isn’t going to do irreversible damage.  Waiting a month may leave scars and may push the money of the world into other financial markets with more “socialistic” governments.

I am thankful for the discussion and the tug of war in the congress, but something needs to pass or the effects of this failure are going to reach much farther then Wall Street.



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