out on bail
by Mark Hunter Mulvey
Published: September 23, 2008
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. — Ernest Hemingway, 1935
Why do people kill people who kill people, to show people that to kill people is bad? – http://www.bananca.co.uk
$700,000,000,000.
A $700 billion bailout is on the table to rescue a flailing, and failing, United States economy. It is an economy reacting to the decisions of men and women at the helm of private equity - that is, U.S. citizens who are running companies capable of drastically impacting the bank accounts across the entire country.
This, if only intuitively, strikes me as bent. The crookedness is made plain when government constituents propose a bailout, a term gleaned from the practice of scuttling water from a sinking ship by using buckets fueled by desperation. $700 billion is more than the cost of the ENTIRE war in Iraq. 700 billion is more than 11 times the fortune of the richest person on the entire planet. It’s a full 5% of the gross national product. Yet it is an amount being proposed in a single transaction by our government during a recession that has honest business men and women struggling to break even. There’s no commentary or opinion necessary to notice that something is amiss here. It is crucial to investigate “bailouts” and their precedent that justifies our current situation in the United States.
In fact, government intervention in times of financial woe is controversial. Here’s the problem: a bailout is completely unfettered - it is guided only by its proponents and is not checked or balanced by impartiality. There is no precedent for a bailout of this magnitude. Not even the Great Depression elicited such a drastic expenditure by our government. The Federal Reserve, “The Fed,” is the latest incarnation of a system first proposed by duelist and founding father Alexander Hamilton, and this central banking system is endowed with the privilege of “Lender of Last Resort.” This clause gives the Treasury the right to intervene in major financial crises. So, after some investigation, we have authority but no precedent.
Fair enough. Here’s the issue: where is $700 billion coming from? The government is spending money it doesn’t have to spend (especially in light of its ambitious renovating of the country of Iraq), so we are faced with a country that, in order to save its citizens, is partaking in the very activity that got its citizens into a dire situation in the first place: irresponsible spending! The Bush Administration is spending phantom dollars in order to get short-term gains. It is the mortgage crisis on a gargantuan scale. It is the largest act of hypocritical scolding ever witnessed by the American people.
It’s farcical but disappointingly true. And if our country is to flourish, it cannot keep treating its Federal Reserve like a credit card to be paid off at some point in the distant future.
Its people are the debtors.
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September 23rd, 2008 at 11:58 pm
The bailout does incredible damage to the business psyche. I own a small business. Imagine if everytime a small business owner made a stupid decision, he or she could run to the county tax coffers to bail themselves out. You would wreck havoc on the economy and waste tax dollars. Morons and their sub-standard products would remain on the market at the publics expense. Though you can claim that AIG is way more complicated and than my fabric store and be right, it’s still doesn’t change the fact that AIG (and other financial gugernauts) were run by morons, and now they’re getting off scott free! Holy freaking crap! How does that help the long term financial strength of the country?
September 24th, 2008 at 6:41 am
Yes….I was watching the financial news on TV last night…and could not believe my ears…one of the items in the bail out list presented to congress from our wall street overseers was that the the government hold all parties harmless for any wrong doing and NO legal investigations would occur……for the honor of giving the the bailout money we would not prosecute any wrong doers? What a bunch of bums we have in D.C. and W.S….there all cooks…time for change…
September 24th, 2008 at 9:24 am
I agree on both counts, and my impression is that the major thing people have a problem with is not necessarily the magnitude of the expenditure, but the fact that there is no penalty for executives who make terrible decisions and still get compensated enormously.
I, too, was immediately appalled by the incredible amount of money that the U.S. government will be “borrowing against our future” but actually, as I have come to understand more, I have realized that it is at least possible that this could be beneficial to us. Should the market cease its downward tumble, return to stability, and then continue its long-term climb (and that’s a big “if”) the government will essentially be following the rule of all good investment - buy low, sell high. Depending on the bargain they are willing to drive - and with these companies in such dire straits they SHOULD be driving a very hard bargain - the government, and by extension the taxpayer, could make a tidy little profit on this bailout. I’m all for profit, but I agree with each of you: my indignation is aroused by the thought that an executive of one of these companies might still be walking away with millions upon millions of dollars.
September 24th, 2008 at 10:37 am
It’s true that the govt. might turn a profit, but that’s not what I want them to do with my money. Taxes are for things like firemen, policemen, roads, the military, congressional junkets to exotic islands under the pretense of improving foreign relations etc. If it’s profits we’re after, we’re better off spending the money ourselves.
September 24th, 2008 at 4:18 pm
Right on James….let it run it’s course. The root cause of this mess will not be fixed with a bail out…oh ya the media propaganda I hear now is it’s an investment…I think that D.C. and W.S. needs a good enema (Fleets….(Joker..Batman time.) We need to go back on the gold standard. President Nixon GOP guy took us off it. President Kennedy was going to put us back on the standard ……he didn’t live long enough to do it……..
September 26th, 2008 at 11:05 pm
McCain’s a loser. But Dave, Nixon came ofter Kennedy. How is it that he was going to put us back on the standard? By the way Kennedy was “going to do” alot of things, but never actually made any serious progress towards anything. Civil Rights legislation was on the back burner in his administration, put there by him. Though he talked a beautiful talk, it was the crass Texan Johnson who actually walked the walk.
September 27th, 2008 at 7:46 am
Yep UR right about the order Kenndy first then Nixion. Sorry I did imply that Nixion first than Kenndy….however my statements still hold water the web link below.
You do know that Nixon took us off the gold standard?..and Kennedy was going to put us back on it (well almost is was silver)..he didn’t live long enough to do it…back then the Dem were more conservative than the GOP is now…. I really am gonna vote the bums out………….
Hey Check this out………..
“http://www.john-f-kennedy.net/thefederalreserve.htm”
September 28th, 2008 at 12:48 am
Here read what Ron Paul has published about the how we got into this mess…
“http://www.house.gov/paul/congrec/congrec2006/cr021506.htm”