Friday, September 19, 2008
As an initial disclaimer, I have always been something of a libertarian -- a kind of hybrid social liberal and economic conservative. The last eight years, however, have called into question some of my ideals.
This week's proposals to bail out the gamblers on Wall Street and essentially stick the American taxpayer with the bill for the failure of the tremendously risky financial markets really takes the cake.
John Cole captures a flavor of my despondency and outrage:
In other words, folks spent years making billions upon billions of dollars on risky transactions, more money on the stock of companies that was artificially high based on those transactions, more money bundling all those transactions into more transactions, and made a killing, and when it turns out the whole thing is a big pile of shit, you and I get the god damned bill.
I do not ever want to hear another damned word about the free market. I don’t want to hear another thing about letting the market regulate itself. I don’t want to hear about the free flow of capital. I don’t want to hear about government getting out of our lives.
None of it. From superfunds to super-bailouts, I am tired of other people getting rich being irresponsible and then being told I have to pay to clean it up. I didn’t read one punitive aspect of this new plan. Not one punishment for the people who did this.
I mean, I understand that now that we are in the situation we are in -- mind you, largely created by John McCain, Phil Gramm and their "tear down these wall of regulation" dogma -- and we now have to obviously avoid a systemic failure of the American financial system. But -- for the love of Jesus on the Cross -- if, after all this, America is somehow stupid enough to elect John McCain... God help us...
Update: Lest we forget, the gas guzzler-obsessed US auto industry is out there looking for a handout too:
Do you want fuel-efficient cars? Well, then GM thinks you should pay to help it retool its business. How? Via $50 billion of government-backed loans...
The American auto industry is NOT deserving of government loan guarantees, any more than any industry is that made as bad a strategic blunder as GM and Ford (F) did over the past decade (putting all its eggs in the gas-guzzler basket, despite having made exactly the same mistake in the 1970s).
Since GM CEO Rick Wagoner believes the oil spike was an act of God, however, it's no wonder that GM and Ford were left flat-footed when oil prices rose to record highs.
GM and the other automakers don't deserve a bailout. But of course that doesn't mean they won't get it.
Update 2: Guess how much it's going to cost us? Oh, only about 1 to 2 TRILLION dollars, all told:
Were the financial crisis to end today, the costs would be painful but manageable, roughly equivalent to the cost of another year in Iraq. Unfortunately, however, the financial crisis is far from over, and it is hard to imagine how the US government is going to succeed in creating a firewall against further contagion without spending five to 10 times more than it has already, that is, an amount closer to $1,000bn to $2,000bn.