Biz, credit markets show how economic woes affect you on clarkhoward.com

Are you still having difficulty figuring out how all the news today -- and of the past 2 weeks -- affects you?

It's difficult to understand why we should help Wall Street bigs who make an average salary of $300,000. If there's one thing we're united by, it's our anger at the bailout bill. People are understandably skeptical when Pres. Bush had been saying everything was OK with our economy, and then he turned around and dramatically changed his tune.

Clark wants to try to show what could happen in a worst-case scenario if the financial markets continue having a nervous breakdown.

As an example, businesses wouldn't be able to borrow money to expand, which pinches future economic growth. With no access to money, businesses may cease to exist; new startups couldn't get funding; or businesses may survive but not grow. All of these circumstances would lead to lower economic growth, potential layoffs and fewer jobs being created.

Meanwhile, you as a consumer wouldn't be able to get credit to buy something. The business that couldn't sell to you then has lower sales, which circles back around and can lead to layoffs.

What others are saying

Bad precedent
I am absolutely infuriated with this. What are we up to now? $2000 for every man, woman, and child in this country? That's 10 grand I don't have. I don't exactly and with any certainty know where all the blame goes, but it sure as he11 isn't mine. I trust Clark to give us the straight scoop of what happens if Washington fails to "rescue" Wall Street (puke!), and understand the implications, but I hate the precedent this sets. How do we prevent this from happening in the future?

A good start would be to confiscate all of the assets (including those hidden overseas) of the decision makers (executives, high-level managers, government regulators, and elected officials) who got us into this mess. Whatever rescue plan Washington comes up with, it should include provisions that make executives personally liable for these type of problems.
By Dan400Man @ 09/30/08 12:13:53 PMreport abuse
Impact of credit market para
Thanks Clark for educating the everyday consumer, who is understandably angry but also a bit naive on what the implications of the freezing of the credit markets are to Main Street businesses and consumers. I work in the consumer credit industry and can attest to the pressures that lending institutions are under (even those that had little to do with the Wall Street mess) and the ripple effect (more like potential tsunami) that this will mean for jobs and peoples' standard of living. This is not conjecture, these are not scare tactics, this is REAL. When the chairman of the non-partisan Federal Reserve says the situation is grave, people need to wake up and take notice. Stop throwing bricks in the path of the solution to free up capital for our economy.
By Jeff Schreiber @ 09/30/08 08:52:22 AMreport abuse
Goverment Bank Bailout Bill
It sounds like in the short term if the bill is not passed, businesses and consumers in a weaker condition will not be able to borrow money now. This will force weaker businesse to close, and consumers to spend less and save more. But this is short term! If the bill passes, then the government and american taxpayer will have to suffer even bigger long term consequences. Capitalism needs to survive on it's own.
Borrowing money to keep pushing off recession will not do anything good for the future of America.
By Darin McKee @ 09/30/08 07:30:35 AMreport abuse
Exactly what we need
Loose credit is what got us into the mess. If the interest rates were not artificially held low by the Fed printing money, we wouldn't be in this situation. Tight credit markets are exactly what we need to get us out of this, not more "hair of the dog".
By Gigs @ 09/30/08 02:48:23 AMreport abuse
Congress
As an owner of a small business and as an employer, I am appalled at the lack of ethics displayed by members of Wallstreet and Congress. If I make a poor decision, no one will bail me out. I can only sit and watch our 401K go down knowing that we have only a few years before retirement and now have no time to recoup any losses. Hopefully, Congress will see the light soon.
By rebecca @ 09/29/08 08:59:28 PMreport abuse
Credit Markets
Clark, On the one hand you are saying
consumers should pay off their credit card debt, tighten our belts and try to live below our means. On the other hand you say that we need this bailout so that consumers will be able to get more credit. This sounds contradictory to me!!??
By MAK @ 09/29/08 05:28:32 PMreport abuse

Bad precedent

I am absolutely infuriated with this. What are we up to now? $2000 for every man, woman, and child in this country? That's 10 grand I don't have. I don't exactly and with any certainty know where all the blame goes, but it sure as he11 isn't mine. I trust Clark to give us the straight scoop of what happens if Washington fails to "rescue" Wall Street (puke!), and understand the implications, but I hate the precedent this sets. How do we prevent this from happening in the future?

A good start would be to confiscate all of the assets (including those hidden overseas) of the decision makers (executives, high-level managers, government regulators, and elected officials) who got us into this mess. Whatever rescue plan Washington comes up with, it should include provisions that make executives personally liable for these type of problems.

By Dan400Man @ 09/30/08 12:13:53 PMreport abuse

Impact of credit market para

Thanks Clark for educating the everyday consumer, who is understandably angry but also a bit naive on what the implications of the freezing of the credit markets are to Main Street businesses and consumers. I work in the consumer credit industry and can attest to the pressures that lending institutions are under (even those that had little to do with the Wall Street mess) and the ripple effect (more like potential tsunami) that this will mean for jobs and peoples' standard of living. This is not conjecture, these are not scare tactics, this is REAL. When the chairman of the non-partisan Federal Reserve says the situation is grave, people need to wake up and take notice. Stop throwing bricks in the path of the solution to free up capital for our economy.

By Jeff Schreiber @ 09/30/08 08:52:22 AMreport abuse

Goverment Bank Bailout Bill

It sounds like in the short term if the bill is not passed, businesses and consumers in a weaker condition will not be able to borrow money now. This will force weaker businesse to close, and consumers to spend less and save more. But this is short term! If the bill passes, then the government and american taxpayer will have to suffer even bigger long term consequences. Capitalism needs to survive on it's own.
Borrowing money to keep pushing off recession will not do anything good for the future of America.

By Darin McKee @ 09/30/08 07:30:35 AMreport abuse

Exactly what we need

Loose credit is what got us into the mess. If the interest rates were not artificially held low by the Fed printing money, we wouldn't be in this situation. Tight credit markets are exactly what we need to get us out of this, not more "hair of the dog".

By Gigs @ 09/30/08 02:48:23 AMreport abuse

Congress

As an owner of a small business and as an employer, I am appalled at the lack of ethics displayed by members of Wallstreet and Congress. If I make a poor decision, no one will bail me out. I can only sit and watch our 401K go down knowing that we have only a few years before retirement and now have no time to recoup any losses. Hopefully, Congress will see the light soon.

By rebecca @ 09/29/08 08:59:28 PMreport abuse

Credit Markets

Clark, On the one hand you are saying
consumers should pay off their credit card debt, tighten our belts and try to live below our means. On the other hand you say that we need this bailout so that consumers will be able to get more credit. This sounds contradictory to me!!??

By MAK @ 09/29/08 05:28:32 PMreport abuse

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Sep 29, 2008 -- Biz, credit markets show how economic woes affect you

What others are saying