Who will clean up the mess?

There’s no doubt that we government should increase oversight on investment companies. However, the most significant difference between Obama and Johan McCain’s bailout plan is whether we should help banking companies in Wall Street. McCain’s plan is to purchase the bad mortgages. As a result, it facilitates increasing the value of home and bank. Obama votes against backing the bank, and he suggests that we should buy these mortgages at current interest rate. Obama, in addition, plans to create a universal mortgage credit and to ensure accountability in mortgage industry. Obama advised taxing small companies who earn more than $250,000 annually. Obviously, he holds the idea that those who benefit from government should pay tax to balance the assets.

If the government choose to back investment banks, it is possible that the banks can recapitalize themselves and start running again. However, according to Dissecting McCain’s bailout plan, it doesn’t give any penalty to the banks who sold risky loans. There’s a possibility that they will start deceiving consumer again.

Investment companies should have taken their responsibility before the crisis. They shouldn’t have lent risky loans to consumers in the first place. Government oversight is one problem. Investment companies deceiving consumers even though they knew it was risky is another story. It’s not about whether to bail them out or not. It’s all about the responsibility they should bear as companies. This crisis should be a warning to investment companies as well as those who want to take advantage to consumers—they can’t expect government to clean up the mess for them.