After hearing the same tired lines over and over blaming our current Wall Street Crisis on greed, Bush and a lack of regulations, I put together some of my thoughts to share. This is by no means exhaustive but, I believe it is important to tell a side of the story the main stream media is ignoring, mainly, that our current crisis stems from a weak, semi-capitalist approach not a lack of regulation. We cannot predict every new idea and regulate it, the only way to prevent this is to let the market be free enough that bad ideas fail and are not propped up by the government. Here are a few of thoughts from a variety of debates I have had:
The beauty of capitalism is that is self-regulating…. if you let it fail. These people should get the come-uppance through failure and it should stand as an example to everyone. Instead, we are bailing them out. That is the precise issue here.
Psuedo-government organizations (half taxpayer funded/government controlled companies (fannie/freddy)) and policy makers promoting homeownership as the American dream forgot about the “pursuit” part in the “pursuit of happiness”. They supported semi-capitalism in the form of bad subprime loans through government subsidized low to no down payment housing loans (started in Clinton’s administration through the FHA loan/rate changes) and the repurchase of bad mortgages in the form of CDOs (grouped mortagage investment vehicles).
All of this regulation and half-government-owned-policy-controlled mush is what got us into this mess in the first place. If the business leaders of Fannie and Freddie had been truely responsible for their results and not partially controlled/supported by the government we would not have gotten into this. Freddie and Fannie set a precedence that was supported by policy and backing from the government, the other banks followed suit. If you have backing from the government it’s easier to make missteps because you have a safety net, other banks followed.
I agree, Bush didn’t solve the problem. McCain proposed a solution in 2005 but was defeated by the Democrats. Obama’s big government spending and socialist ideology is a sure way towards more of this type of disaster.
Freedom includes the freedom to fail and the freedom to pick oneself up. Higher taxes and government bailouts make captilism look bad and hurt the American people. McCain/Palin understand this (to an extent, they are still not perfect), Obama doesn’t.
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Tags: bailout, free market, freedom
I have to say it…I agree and disagree. I agree that bailing out Wall street is sending the wrong message. Those investors made decisions that put millions of peoples assets at risk and entire corporations. Yet, they will receive multi-million dollar bonuses. However, it can not be denied that the middle and lower class are running on fumes. The real sector of the economy is doing fine–for now. But, inflation, higher unemployment, stagnant wages, college costs, trillions in debt, bad fiscal management, a war costing us and our creditors billions a month, and general Legislative and Executive incompetence has brought us to an apex of disaster. We may witness the biggest economic collapse…ever. Thus, the part I disagree with you about, is not doing anything. I do not think a caring person would choose to let this happen. We need a bail-out plan that fixes the problem and helps those that need it, not a plan that transfers wealth from the poorest to the richest, which is exactly what this plan will do.
Excellent read. The whole bailout situation doesn’t go over well with me. Hope you check out my blog if you get a chance for related links, info on sites that help people protest the bailout, in its proposed form.
For the record, while I do not like the bailout, while I do not like the idea of a bailout, I much more dislike the idea of another depression, even one that people may in some sense “deserve.” Ergo, especially after the taxpayer protections inserted by Cantor and Ryan, I would have supported the House bill.
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