So how is everyone doing? Are things great or what?! In all seriousness, at the risk of making a ridiculous understatement, this is a pretty tumultuous time in this country. There have been a couple of requests (thanks Booty Juice) for a post about the proposed $700 billion bail out, so I thought I would take a stab at it. A preliminary agreement was reached by the White House, the Treasury, and the House and Senate this weekend on the infusion of $700 billion via Henry Paulson and the Treasury Department. There have been some pretty strong words used to describe the Paulson proposal, socialism being among the most acute and divisive. Now, I think Leadcritic has remained successfully apolitical, even in this hotly contested campaign year, and I don’t want to change that now. I will also preface this post with the fact that I consider myself to be one of the more fiscally conservative people I know. I am not a fan in the least of taxes or government intervention in a free market economy. That said, we, as a country, need to ask ourselves what will the price be if the government does not provide this $700 billion?

Hopefully at this point we all agree this is no longer a $700 billion Wall St. bail-out. This situation has transgressed well beyond the limits of white collar, blue-blooded Wall St. profiteers. If you didn’t catch the article a week and a half ago from the New Your Post, “Almost Armageddon,” read it now. According to the author, on Thursday, Sept. 21st “The market was 500 trades away from… the Dow… collaps[ing] to the 8300 level – a 22% decline!” Folks, Black Tuesday, October 29, 1929, only saw a 12% drop in the DOW on that day. What saved history from potentially repeating itself was the Treasury stepping in and injecting a quick $105 billion of liquidity. We were very, very close to financial doomsday just the week before last and we are far from being out of the woods.

So, today, when we talk about the proposed bill before congress this week for a $700 billion infusion of liquidity, make no mistake about it, it is a bail out. But it is not bailing out Wall St. this is bailing out all of us. This is about our jobs, our parent’s jobs, middle-America and our everyday, functioning economy, not golden parachutes to the robber-barons at Goldman Sachs.

At this point it is academic to debate on what got us here; for example would more regulation in the mortgage industry prevented this from happening (no!)? The alternative is a financial crisis the likes that this generation has not seen. So when you talk about financial wizards such as Warren Buffett who have called the turmoil in the markets “economic Pearl Harbor,” supporting the bail-out, then I am afraid that I would tend to value his opinion more than any politician – regardless of their party affiliation – using the topic as a grand stand for their re-election bid. Buffet said recently:

“I think the Treasury will pay back the $700 billion and make a considerable amount of money,” Buffett said, adding that if he had $700 billion on the government’s terms to buy distressed assets, he would. “Unfortunately, I’m tapped out.”

Don’t get me wrong, I am not without reservation. After all, the bulk of the agreement that was reached this weekend was penned by Barney Frank, one of the most liberal members of congress, if not the most liberal. Say what you will about their politics, liberals are typically not the friend of business. Also, the structure of the bill would give what could be called a constitutionally questionable amount of authority to Paulson as to how and where the money will be used. But again I stress the idea that, if we do nothing, then the potential outcome could be catastrophic. We have already seen what became of Washington Mutual. And as I am finishing this, reports are coming through of the purchase of parts of Wachovia by Citi. To paraphrase a quote by Winston Churchill, this bail out plan is the worst option, besides all of the others.

So my recommendation is this. The biggest barriers to this bill passing in the House today and the Senate on Thursday are my fellow Republicans. They are against this for a myriad of reasons, and most of them probably good. This level of government intervention goes against the fabric of fiscal conservatism. But it is necessary. To stave off a financial implosion the likes that this country has never seen, this capital infusion needs to be passed. I urge you to reach out to your congress people and ask them to vote in favor. I kind of enjoy this industry and I want to remain working in it.