Too Ugly To Watch

Michelle Malkin has a round-up on the Citicorp bailout. She's been consistent in saying the bailouts won't work. I agree and disagree with Michelle. Let me explain.

Simply put - America, the world in fact, is in trouble because of bad credit and bad risk-taking. Jumping up above the dirty details and blame, let's assume there are basically two ways out of this mess.

We can let failed credit, failed businesses and failure all around fall - or we can prop it up. The government is opting to prop it up with "good credit." But the truth of that good credit is that it is the ability for working men and women to "pay it back" for generations to come.

The rosy scenario from pro-bailout folks is that businesses will revive and ultimately remove future taxpayers from that scheme. Unfortunately, I'm unconvinced that will happen, whether the economy revives quickly, or not.

Both Bush and Obama are determined to not let Americans feel any more pain than is absolutely necessary. But in relieving that "pain," you are also tinkering with fundamental free market forces.

Risk is made to not be risk, failure is no longer failure. And a lack of responsibility amid the private and business sectors, right down to the individual level, is going to be rewarded. Without those fundamental influences at work, you have no free market at all.

The government is encroaching into the private sector to the extent that it's now bordering on a nationalization strategy. Do you really believe that with Democrats running things they will give up that encroachment and the subsequent control that it brings?

I don't.

They are already intent on involving themselves even more deeply into the health care realm. That constitutes one-seventh of America's economy. It was only a year or so ago that Nancy Pelosi actually mouthed words to the effect that perhaps the oil companies should be nationalized.

I wouldn't expect such things to happen over night. This is not a "the sky is falling" post, though perhaps it should be. We're talking trends here, not an outright coup against the private sector. And the trend I see emerging is the steep part of a very slippery slope to the Europeanization of the American economy.

We are telling people that can't afford the home or car they bought that they should have a right to keep it. We are telling failed businesses that it's okay to stay in business so long as you cede some control to the government.

Ultimately the people who get the bill for all this will not be the irresponsible actors and failures. It will be the vast majority of current and future Americans who pay their bills on time and play by "the rules."

If such things have no meaning in America due to the current and pending bailouts, how is it we can hope to have a new generation of Americans who see prudent risk-taking and playing by the rules to be noble goals? How is it we can tell people that you might have to wait and work a little harder to get just what you want, as opposed to assuming it is somehow your birthright?

My biggest fear isn't that these bailouts won't work. They'll be marginal, at best, and the economy is going to be in the dumper for some number of years no matter what we do. That in contrast to a shorter, harsher but necessary bit of pain. It's a pain that, by free market standards, America has to feel as payment for a spending/credit spree that was out of control.

My bigger fear is that the bailouts will "work" in preventing a total meltdown by ensuring that future generations of Americans will come to know the grinding pain of a system that will give us permanent and almost total government control and responsibility for nearly everything in America.

Certainly "calmer heads" might disagree. But tell me this - under current Republican and Democrat policies, point out one area in which, given a choice, government opted to not grow?

That is explicitly not what the Founders of this great nation had in mind over two-hundred years ago. They knew, as any honest student of American History must confess, that the government that does more has only rarely, if ever, done best.

But, hey, we had a good run. I guess you can say that much is true.

Comments

[Todd]

http://www.marshall.usc.edu/news/all-articles/laffer-predicts-rosy-future.htm

Noted Economist Arthur Laffer Predicts Rosy Future for U.S. Economy (Feb, 2006)

Arthur Laffer, the economist whose hand-drawn curve on a napkin in a Washington bar helped spark a nationwide tax-cutting movement, says the U.S. economy is 'the single, best-performing economy in the world.'

'Based on what people say, one would think the U.S. economy is in terrible shape. In fact, the U.S. economy has never been healthier,'

To support his view of the U.S. economy's stellar performance, Laffer pointed to estimates that the GDP is expected to grow between three percent and five percent in 2006, calling the economy 'designed for performance.' He drew comparisons between the current prime rate of 7.50% and prime rates of 21% in the early 1980s, cited the 15% tax rate on long-term capital gains and dividends taxes as being the lowest he has seen in his 65 years, and said corporate profits are the highest in U.S. history.

Indeed, the economy is so good, according to Laffer, that there are no dark economic clouds looming, with one exception. California is a 'disaster in the making,' he told the luncheon crowd. One of the architects of Proposition 13, Laffer said California is embarked on a huge, misdirected spending spree. He supported Propositions 74, 75, 76 and 77, which were defeated in last November's special election, as measures to curb spending.

[Todd]

after you wasted your time looking for the guy who pointed out the pending disaster, related specifcally to subprime lending for 2006,

I'll trump you.

"If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."

the 'economist' was John Mccain, 5/25/06.

http://hotair.com/archives/2008/09/17/mccains-attempt-to-fix-fannie-mae-freddie-mac-in-2005/

Posted by: mark l. | Tuesday, November 25, 2008 at 06:01 PM
----------------------
Where was McCain's comments about the danger posed by the deregulation from the CFMA of 2000, pushed through by his buddy Phil Gramm? He could have been a hero back then.

[mark l.]

your nyt cite?

reported 8/17/08 on a meeting from 9/06.

Would have helped if the author bothered to look at the transcipts. A little drink of the koolaid, and the media is well on its way to creating another myth. Pretty strange not to have the money quote included.

it would really bolster his wiki entry if the could put the exact reasoning he offerred for the pending crisis.

as it stands, mccain's quote is even more timely than roubini's, but I wouldn't tout mccain as an expert for his correctness and more than you should roubini.

[mark l.]

"Where was McCain's comments about the danger posed by the deregulation from the CFMA of 2000, pushed through by his buddy Phil Gramm?"

yaawwnn...

This is like listening to drunk explain that he wasn't drunk becuase he had too much to drink an hour ago, but becuase his father beat him 10 years ago. It is the weakest of excuse to ignore the democratic disaster that became of fannie and freddie. I am amazed that there isn't a single former gop'er who recieved a lucrative payout from the gse's. It is incredibly damning and no ancient policy is going to obscure the exclusive fingerprints on fannie and freddie. Accept it, and move on. Don't keep deluding yourself out of party loyalty.

[Todd]

I'm amazed you don't accept the damage done by Phil Gramm. Yawn.

[AdrianS]

SIGN THE PETITION TO FORCE BARACK HUSSEIN OBAMA TO PRESENT HIS QUALIFICATIONS.

PETITION FOR PUBLIC RELEASE OF
BARACK HUSSEIN OBAMA'S BIRTH CERTIFICATE

To: Electoral College, Congress of the United States, Federal Elections Commission, U.S. Supreme Court, President of the United States, other controlling legal authorities

Whereas, by requirement of the United States Constitution, Article 2, Section 1, no one can be sworn into office as president of the United States without being a natural born citizen;

Whereas, there is sufficient controversy within the citizenry of the United States as to whether presidential election winner Barack Obama was actually born in Hawaii as he claims;

Whereas, Barack Obama has refused repeated calls to release publicly his entire Hawaiian birth certificate, which would include the actual hospital that performed the delivery;

Whereas, lawsuits filed in several states seeking only proof of the basic minimal standard of eligibility have been rebuffed;

Whereas, Hawaii at the time of Obama's birth allowed births that took place in foreign countries to be registered in Hawaii;

Whereas, concerns that our government is not taking this constitutional question seriously will result in diminished confidence in our system of free and fair elections;

http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=81550

The above article appears on WorldNetDaily.