Posted by
flagwaver on Sunday, October 19, 2008 9:46:09 PM
A couple of weeks ago the President, the Congress, the Treasury Secretary, the Fed Chairman, Alan Greenspan, the media…hell probably Homer Simpson, too were all out braying about how much the
$700 BILLION bailout bill was needed to “rescue” the economy from imminent ruin. If we didn’t get a bill written and signed, they told us, the economy was going to collapse in front of our eyes; we just could not go on unless the government gave these failing private enterprises
$700 BILLION of our tax dollars to keep them afloat. Bush, Bernanke, Paulson, Schumer, Pelosi, Gretchen Carlson, etc. all told us that it was imperative to do this deal, and that it would be the savior of the American economic system.
Well a couple of weeks in, we see how big a crock that was! The day the bailout bill was signed, the Dow average, the S&P, NASDAQ, Nikkei…all of them dropped faster than a hot rock, and continue to tumble today. From a stock market that had reached all time highs, and seemed to be setting new records almost weekly, we have a market that (last I checked) was struggling to stay above 8000. The markets have all adjusted down since the government stepped in to “save the day” and although I am no economist, I think I understand why.
The thing that all the “experts” don’t understand is that they did not instill any confidence by running in to bail this group out, especially after they just assumed control of Fannie & Freddie. What this bailout did was create a sense that there was another shoe about to drop, since the government had assured us that the Fannie & Freddie situation was where they were drawing the line. Remember how they got on a soapbox after denying any help to Lehman Brothers and declared that the government was not in the business of bailing out failing businesses? That went by the wayside as soon as they convinced themselves that America was clamoring for the government to intervene in the markets, even though they had to ignore every normal person they ran into who was telling them otherwise!
People understand that it is a bad thing generally for the government to try to take over the markets, or to try to rescue the economy. Whenever the government has decided to take an active hand in the private sector it has worked out poorly for the nation; see the government interventions of the1920s that led to the Depression or the price control mistakes made by President Carter in his term during the 1970s. The people realize that the government isn’t that great at what it’s supposed to be doing, and they fear that government intervention will only make things worse. Also, it doesn’t help this measure that the people have watched their elected leaders deliberately circumvent the Constitution, admit to it in public, and then pretend that it was all for the best! When the people see the government doing things like that to achieve an end that they are adamantly opposed to, it destroys any confidence that the people may have had in the government’s ability to make a positive difference.
With this bailout failure they proved the truth of Ronald Reagan’s famous adage: “The nine most frightening words in the English language are, “I’m from the government and I’m here to help.”