Bankruptcy

Bailout Deal Reached; No Help For Foreclosure Victims

UPDATE: From The Huffington Post comes this article by Dean Baker: Why Bail? - arguing there is no good reason to bail out Wall Street and several good reasons not to lift a finger.

In the immortal words of Little Richard: Good Golly, Miss Molly.  What the bejeebers is going on with this economy?!

Well, we pick up with where we left off last week. At the week’s close, we were debating the bailout and what to include. Despite the best efforts of some of the smartest and most dedicated consumer advocates I know (and know of), the big-biz-friendly Congress “declined” to actually help out the consumers whose foreclosure cases lie at the heart of this meltdown: there is no provision for bankruptcy cramdown in Chapter 13 within the proposed bailout legislation.

Then, on Friday came news of a troubling overnight development: the collapse of consumer finance giant WaMu and its subsequent asset seizure by the feds. Friday night, of course, Republican presidential candidate John McCain changed his mind and went to the debates, and never mentioned the middle class.

And over the weekend, the rumblings we heard last week about the proposed bailout became loud roars of protest. Judging from some of the mailbag entries at this MSNBC.com page, there are a boatload of angry taxpayers out there who do not think this bailout is such a good idea at all.

I confess, I remain committed to my initial thoughts - that the bailout was a regrettable necessity. But how it’s been pursued - and most importantly, what it includes and even more telling, what it does not include - these issues leave a very sour taste in the mouth of many, and I’m no different.

And then today we get the news that consumer spending has slowed.

In other news, water is wet. Ice, we hear, is also cold, but these reports have yet to be confirmed.

© 2008 SC Bankruptcy & Consumer Law Blog.