Bailout too fast and you end up adrift

It's been an "interesting" few days in the financial markets.

Yesterday, the DOW dropped about 777 points. So far today, it's bounced back about half that.

Yesterday, the media went from being all "Rah! Rah! Huzzah! for not rushing the bill through without looking at it!" to "OMG! How could they not approve that! We're all gonna die!"

Ever few hours, there seems to be something new coming to light about this proposed bailout--be it accusations of partisan politics, finger pointing about who's fault it is the measure failed or, more rarely, some actual looking into what's actually in the damn bill.

If you haven't seen it yet, here's an interesting tidbit: Apparently, there's a line in there that would allow banks to not carry any reserves to back up their transactions. In all fairness, it appears that the idea snuck in two years ago. But the current legislation that was defeated in the House would have made that happen on 1 October 2008 instead of 1 October 2011.

Now, I'm no financial genius, but I do have at least some background in business and numbers. If we've gotten into this much of a mess with banks having to have actual cash on hand to back up their transactions, imagine how much worse that would be with none of their own money backing them up.

Here's another thing I've been pondering: the biggest actual issues (outside of plain, stupid, blind greed) behind this mess seems to be the reliance on perpetual, continuous growth. Everything bought on speculation is bought with the expectation that it will eventually be worth more. Heck, that's pretty much the entire basis for the stock market as a whole (as I understand it--correct me if I'm really off base with that).

Perpetual, continuous growth just doesn't happen. At least not without some dips here and there. In recent times, though, dips set off panics that go right ahead and make the dips bigger.

Yesterday, the DOW dropped 777 points. That's a big dip, for sure. But today it's bounced back up by over 300 (so far). All of that was on speculation--effectively anticipation--of things that had yet to happen. And every single one of those anticipations were measured against an infinitely increasing profit line.

Too bad reality doesn't exactly match with those anticipations. Nothing grows forever. There's always some ebb and flow. That's why I was always told that the stock market was a long term investment medium. Put some money in and just let it ride. In the long run, you'll usually come out on top.

But no one seems to be looking at the long run. In fact, it seems that as things become more uncertain, that uncertainty multiplies itself in full-out panic which destabilizes things even more.

Everything I've seen about this bailout legislation fails equally to take the long view into account. $700 billion now will not fix everything. At best, it would patch a severely broken system. At worst, it will reinforce the mindset that private companies can gamble public money away with impunity.

There's no question that something needs to be done. The more I read, though, the less I think a bailout is the way to go. Especially a $700 billion one financed by We The People that could go directly into the pockets of private companies that don't seem to give a damn about the rest of the population (not just of the nation, but of the world).

What do we need? I don't know for sure. But if anything, it should focus on the bottom of the pyramid and not the top. Money freed up at the lowest levels invariably makes it's way back to the top. As anyone who lived through the Reagan years should know, that whole "Trickle Down" theory is, at best, a fairy tale. Money put in at the top, stays there. Gravity does not come in to play.

What needs to be put in place at those upper echelons are more rules--rules that get enforced fairly and regularly--to encourage some amount of actual giving back to those less fortunate. Or, at least, to encourage not outright ripping out the lifeblood of your major consumers in order to feed whatever greed demon you've sold your soul to.

All the arm-waving and doom-saying is seeming a whole lot less impressive as yesterday's losses are erased (or at least mitigated).

The economy did not grind to a halt.

The world did not stop turning on its axis.

And I'm sure savvy business people all around will be turning a decent profit on this somehow.

That's what real business is about. It's not taking everything you can and not looking back. It's about taking what you have and making it as useful as possible for as long as possible.

It's about the long view.

Until we all realize that--all up and down the pyramid--we're going to remain screwed.