Don’t be tempted to think that this is a “political” issue.  This is about the real estate market, pure and simple.  If this bailout plan passes, the U.S. economy and the real estate market will likely be on incredibly shaky ground for years to come.

My friend, let’s put “labels” aside for a moment.  Let’s suspend being “republicans” or “democrats” or “liberals” or “conservatives” for now.

The bailout program before Congress right now is an abomination.  It’s essentially a $700 Billion slush fund designed to protect horribly-managed companies from the error of their own poor judgment.

There is no room for this foolishness.  The free market has been restrained by the government for years now, as evidenced by formal government policy documents that encouraged and forced government lenders to approve loans for completely unqualified borrowers.  Private lenders rushed in to be competitive and to take advantage of the highly liquid market created by the government for these bad loans, and thus the cancer spread from just GSE’s like Fannie and Freddie to private lenders as well.

The original fault for all of this lies with government.  Horrible public policy during the Clinton Administration (which was never withdrawn by Bush) gave life to this situation, and Senator Chris Dodd and Congressman Barney Frank are so deep in the creation of this problem that they would be tarred and feathered if their constituents realized what they’ve done.

But they’ll never know, and frankly, right now isn’t the time for that.  Yet.

What’s necessary is to call your Congressman and Senators and ask them NOT to support the bailout.  If we allow the free market to fix this problem, the problem will actually be fixed.  There will casualties, and there will be some pain on Wall Street.  But to think that this situation can be resolved without pain is foolhardy.

To see how effectively the free market can solve problems - even while partialy hamstrung by government interference - just look at what has happened in the past two weeks:

• Bank of America acquired Merrill Lynch
• Citigroup has acquired the banking operations of Wachovia
• JP Morgan has acquired the assets of Washington Mutual
• Berkshire Hathaway (Warren Buffett) has acquired a massive stake in Goldman Sachs

It’s quite probable that if the bailout package had been in place 2-3 weeks ago, at least 2 of these acquisitions wouldn’t have happened, and the result would have been weak, poorly run companies dumping more bad debt onto your back.  Sure, Wachovia and Washington Mutual may have survived - but you would be left holding the bill for it, and with no hope of a return for your tax dollars invested.

The Bailout plan is bad law.  It’s foolish through and through.  A free market solution is the only answer here.  Let the suffering companies declare bankruptcy.  Let the stock market take a huge hit.  And let the heads of responsible executives and politicians roll.  Corporate excess is not remedied by government excess.

There’s not yet “blood in the streets”.  But soon there will be.  The question is:  will it be your blood or that of foolish companies and politicians?  If you want the responsible parties to face the music, call your Congressman and Senators and tell them not to support the bailout bill.  And do it now, because the votes are supposed to be cast today.   To find out who your Congressman and Senators are, click here and enter your zip code in the upper left side.

Your comments are always welcomed here at Bryan Ellis’ Free Real Estate Training.