Reckless

Well, so much for companies and their executives accepting responsibility for their reckless business decisions. The US government has given in to the pleadings of Wall Street and announced a bailout plan that will cost taxpayers about $700 billion dollars and according to a New York Times article will raise the national debt ceiling to $11.3 trillion. This is just completely outrageous!
And since I’m going to have to contribute to buying these toxic CDOs (yes, I still have to file and PAY taxes even though I live abroad), I can only hope that the government will buy them at a sharp discount. Folks, I’m talking about pennies on the dollar — not the inflated price the banks want to say they are worth — because if the government doesn’t negotiate hard for this sort of deal, then it will create even more moral hazard in the future.
Why? Well, this bailout plan does not even begin to address any penalties or possible punishments for those who are eventually found guilty for creating this mess. Perhaps that will come later. As if it doesn’t, there is the increased probability that the next time, it will be even worse.
This plan in its current form will just encourage more risk without fear of any real consequences. Apparently, all financial institutions (well except for Lehman Brothers) are simply too big, too important to fail.