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Time to pick up the phone…

The crisis facing our economy is unprecedented. As former President Bill Clinton said in his interview with Larry King (aired on CNN last night after President Bush's address on the crisis), this is a time for humility – where the true roots of the crisis lie will be hotly debated for years to come. After all, as a true Black Swan event, human nature condemns us to seek a rational explanation… and of course to pin the blame on someone else.

Regardless of how we got here, the crisis has frozen the credit markets – the implications of this illiquidity are dire and need prompt action. Meanwhile our elected officials have turned this into "Wall Street versus Main Street" – a cute moniker but one that ignores the realities that most American's have sizeable exposure to the equities markets.

An opinion poll in today's Wall Street Journal shows that voters expressing an opinion on the "bailout" are divided (33% against, 31% for), not surprising given the complexities of the issues.

Why "bailout" in quotes? To me this is not an issue of saving "Wall Street" by purchasing "bad" assets but instead of restoring liquidity to a frozen market. There have been several articles that do a great job explaining the underlying problem and of pointing out that the Government stands to make a good return for its assumption of the risks. For example, Briefing.com has a great article – "Why the rescue plan can work" and today's Wall Street Journal has an op-ed piece by Andy Kessler – "The Paulson Plan will make money for the Taxpayer" that makes the same point.

President Clinton pointed out to Larry King that the US made money when it "bailed out" Mexico and Chrysler in the past. There's a lot of smart money (including Warren Buffet) that I believe think the same way.

It's appropriate for our representatives to investigate and debate how to structure the plan proposed by the Treasury and Federal Reserve – but that debate can't go on nor get split by partisan politics. So please, get current on the issues, realize that the plan (with safe guards) can be a solid move to unfreeze the credit markets and then pick up the phone and call your representative to tell them you support the plan.

I made my call yesterday.

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STU PHILLIPS
MENLO PARK, CALIFORNIA

Intense Brit, lived in Silicon Valley since 1984. Avid pilot, like digital photography, ham radio and a bunch of other stuff. Official Geek.

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