The Relentless March of the Financially Clueless
Congress Plays the Blame Game
As expected, Congress is fully engaged in grandstanding and pontificating over the Paulson/Bernanke bailout plan. Public statements from congressional hearings serve as a catalyst for continued volatility in the markets. The Democrats countered Paulson’s three-page bill with a forty-page bill of their own. “OK Mr. Paulson, I’ll see your $700 billion and raise you another $300 billion!”
Germany Knows Better than to March with Us
The German government has already dismissed attempts by Washington to get the Germans involved in purchasing mortgage backed securities from troubled U.S. investment banks. Who can complain when the Germans are saying what many U.S. taxpayers are thinking?
State Politicians Join In
Apparently, some state level politicians were envious of all of the attention being given to our national leaders. I found this report from Investment News particularly discouraging:
Massachusetts Secretary of the Commonwealth William F. Galvin today called on Congress to temporarily suspend the 10% penalty tax on early withdrawals from 401(k)s.
Yes, folks, when all looks lost in desperate government attempts to solve a national economic crisis, financial genius Mr. Galvin thinks we should remove one of the few effective barriers to premature employee raids on retirement funds. Maybe Mr. Galvin believes that his public demonstration of poor judgment will earn him votes from broke constituents eagerly looking for just one more spending binge. When credit limits are maxed out, that 401k money is quite appealing.
Many American Consumers Remain Oblivious
Meanwhile, over at the excellent Simple Dollar blog, Trent wrote about a college freshman who posed the following question:
I know I need to build up some good credit for the future, when I have to get a car loan and such, but I don’t know where to start. I’m worried about getting way into debt like some people I know.
I left a comment pointing out how sad it was that this young adult had apparently resigned herself to a lifetime of credit usage, including having a car loan. Instead of worrying about how to establish a credit history, I recommended that she use some college classroom time learning economics and personal finance. All of the other comments completely ignored this option and remained focused on what kind of credit card would be best for a college freshman. Credit crisis? What credit crisis? We must recruit more soldiers to march in our long green line of credit score obsession!
It seems that there is a never ending supply of those who are financially clueless. They push on, undaunted by the mountain of terrible economic news around them. The problem is, there are lots of them and they vote too. Will Congress get in their way? If history guides us, I think not. Indeed, Congress marches with them.