On Monday, the Dow Jones experienced its worst drop in history, plummeting 777 points. This freefall was the result of the failure of the Bailout Bill"" in the House of Representatives. Although there were various problems with this bill, there was an understanding between Democrats and Republicans that inaction was far more disastrous for the stock market and the economy at large. Especially disappointing were the spiteful partisan attacks that came from both sides and the representatives who voted based on their re-election odds.
Let me be clear, I am a strong Democrat, but I believe both sides are at fault for the economic crisis. Congress has become increasingly divisive since 1994. While that might make for exciting elections, it is horrible for the American people. Now is the time for Democrats and Republicans to come together and find a true compromise that assists financial institutions, but also provides strong oversight and protection for the average citizen. The era of deregulation and the golden parachute must end, and our representatives need to understand that concept.
Deregulation, which began in the 1990s and continued through the second Bush administration, allowed corporations to take irresponsible actions in the name of profit, which ultimately harmed both the businesses and the public. Deregulation is short sighted and is ultimately bad for the economy and the country.
We must also limit the golden parachute, which is an agreement between a company and executives specifying benefits the executive will get if fired. While there are positives to the contract, mostly dealing with job retention and company takeover, the parachute can be exploited. For example, Carly Fiorina was CEO and chairperson of Hewlett-Packard. During her tenure, HP's performance plummeted and thousands of employees lost their jobs. As a reward, Fiorina was given a $21-million severance deal. Executives who send companies into ruin should never receive these ridiculously lucrative deals while other employees lose their jobs.
If these large banks and financial institutions fail, there will be enormous ramifications for Main Street. People with a pension, a 401(k), or stocks will suffer. Local banks will go under and be bought by larger companies. Even the holiday season may be in danger as consumer confidence continues to drop and many stores may suffer as a result.
What's worse, now the majority of banking transactions are overseen by three companies: Bank of America, JPMorgan Chase and Citigroup. Should anything happen to one of these companies, it could be disastrous for the millions of people with savings accounts, checking accounts, loans or college funds.
If these economic woes continue without Congressional intervention, it will be Main Street, not Wall Street that will pay the price. We need to tell our elected officials that we are sick and tired of waiting for a solution. Congress needed to act yesterday to solve the economic crisis, but if they don't act today, we can't expect much of a tomorrow.
Paul Axel is deputy volunteer coordinator of College Democrats. Please send responses to opinion@dailycardinal.com.
