Yes, another one... by Rusty Sullivan
(libertarian)
Friday, September 26, 2008
As anyone not living in a sensory deprivation chamber in Siberia knows, our illustrious government is in the process of working on a "bipartisan agreement" to extend federal aid to the tune of over a trillion dollars to corporations such as AIG, as well as to purchase bad debt from mortgage lenders across the country in an effort to head off what Bush has called a "serious recession".
Of course, the old axiom of "There Ain't No Such Thing as a Free Lunch" comes into play. The money has to come from somewhere, and those who hold the power aren't in any hurry to pony up their own money to pay for these corporate handouts. Of course, the heads of these companies have largely departed, taking with them huge contractually guaranteed severance packages. These men were guaranteed huge bonus and said severance packages based on growth, and that growth counted Accounts Payable, both good and bad, as assets.
The purpose of this article, however, is not to complain and moan about the exorbitant amounts of money paid out to these pirates, nor to bemoan the self-evident fact that you and I, the American taxpayer will be expected to pick up the tab for the mismanagement of a) the companies and lenders in question, b) the executive and legislative branches of our government who are answerable to the American public, and c) the Federal Reserve Bank that isn't answerable to anyone. This article is meant to explain the flaws in the philosophy, as well as issues I have with the way these "bipartisan agreements" are coming to pass.
In a scenario remarkably, yet not unexpectedly, similar to the situation in the days following September 11, 2001, the Bush administration is sending its "experts" (although, calling Ben Bernanke and Henry Paulson experts is tenuous at best) to testify before both houses of the U.S. Congress that we "must" have a bailout arrangement in order to avoid said "serious recession". Of course, you have your fiscally conservative mainline Republicans such as Kentucky Senator Jim Bunning, as well as the ever-thrifty Representative Ron Paul of Texas crying foul, telling everyone who will listen that these cycles happen, and that the correction needs to happen. Unfortunately for them, and even more unfortunately for you and I, the majority is not listening, and, barring some filibuster or other maneuvering, an agreement will likely be reached within days.
Other than the obvious increase in taxes and delay of national progress that such a series of expenditures would cause in and of themselves, there are other problems:
The bailout is a temporary thumb in the proverbial dike, with increased pressure building behind it. You see, one can liken this bailout, as well as other such schemes in the current governmental scope to a person falling down a flight of stairs.
Let's call him "George" (names have been changed to protect the innocent).
As "George" falls down the stairs, his instinct is to grab for the railing, the wall, indeed anything he can find to stop his rapid and painful decent. Unfortunately, as George gains velocity and finally grabs onto the sturdy rail, he dislocates his shoulder, creates an awkward angle of decent, and effectively guarantees that, rather than landing flat on his back and retaining the ability to pick himself up and climb up the stairs again, "George" finds himself in traction, having broken his neck as a result of his attempts to forestall the inevitable.
In other words, this "Band-Aid on a gut shot" tactic may stop the bleeding for the moment, but the economic pressure for a correction will continue to build, and, rather than a recession, we will be dealing with the hemorrhage that is a depression.
History shows us that government bailouts before, during, and after such meltdowns do not work, and are actually a detriment to the prevention of and subsequent recovery from such meltdowns. Even the illustrious Ben Bernanke admitted that the governmental policies of artificially propping up the economy and inflating housing prices was the reason that the Great Depression lasted as long as it did. Given that knowledge, Big Bucks Ben still flies in the face of that knowledge by stating, in a nutshell, "but this is different".
History tells the tale, as it always does. Recessions result from the normal ebbs and flows of a fiat currency-based and collective banking-directed economy. Depressions result from legislative interference in said economy. If they insist on continuing the farce that is the Federal Reserve, they must be willing to deal with the negatives as well as their perceived positives.
The worry that the Fed is as evil as Paul, Bunning, and other opponents of collective banking have been claiming all these years, and the majority of Congress will be held directly liable for defending such tripe as the Federal Reserve and its fiat currency is so strong that this majority is willing to gamble the future of an entire nation on bad debt in order to cover it up.
The Bush Administration is, much as it did in 2001 and 2003 to push through the Patriot Act and the War Powers Resolution, using fear as a motivation and blinding tactic to prevent the careful review and necessary debate needed in order to properly deal with this legislative action. Thankfully, there are a few people on either side of the aisle who are willing to say "Whoa there, Tex!" and make George (no relation to the mishap-prone sap in the first point), Dick, Ben, and Hank defend their position.
God forbid that this Administration would have to use logic and reason rather than raw emotion and underhanded tactics to justify its actions.
You see, the initial cost of the bailout will be huge, and its impact on taxpayers will be enormous, but the real cost of the bailout will dwarf the numbers that Ben, Hank, George, and company are pitching.
With the way things are shaping up, the amounts of money in question, not to mention our current globally-interconnected economy, this debacle has a shot at making the Great Depression look like a walk in the park
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The most disturbing thing about the proposed legislation, in at least one of its incarnations, is the specific exclusion of the Fed from any judicial or legislative review/accountability. Pathetic. The truly pathetic thing is that Congress will pass such a measure. The fact that they are even considering is, let alone being close to an agreement, shows that there is no hope for this country barring some major upheaval, either economic, political, or otherwise...
And, I think the appellation "Rusty" is appropriate because your remarks certainly seem to be.
I am responding to you at your article because you addressed me ~ with some ingracious, and certainly shortsighted, remarks ~ about my article on Tax Cuts being shameful. In fact, I think you make the very point I was trying to purport ~ that people refuse to see the benefits that government provides with the taxes that are paid. Bridges, highways, police and fire ~ on and on. There are gazillions (officially recognized as a new word last year) of wonderful, marvelous, incredible things that are provided by our governments, at ALL levels.
Then, there are the scoffers ~ those who love to see a smudge on every smooth surface, who love to kick a dent in every unblemished fender, and who love to point to areas where improvements can be made as if they are the EXAMPLE not the EXCEPTION to the rule.
Every example you gave in your smirking diatribe about what you seem to think are WASTED expenditures of the federal government ~ war in Iraq, schools, Homeland Security, propping up dictatorships, Gitmo, even poor (steroid user, in my opinion) Roger Clemons got tossed into the trash bin for hearings that you seem to think were unnecessary.
These are all just things that you seem to disagree with or don't support, they are not things that in any way give a universal blemish to government spending. All of these expenditures were made in an orderly, lawful way and not even MOST people would agree that they are inept.
If you think people disagree about Iraq, why is the race for President so close? McCain wants to continue it! He thinks we're winning! Congress hasn't dismantled Homeland Security even though you love to piddle your selective criticisms on a program that has had to completely change the way we handle foreigners coming in and out of our country. And, propping up dictators is something that MUST be done as surely as propping up weak congressional districts if you want to get things done in other parts of the world.
Your naive and trite remarks about government waste are like the fat man sitting on the sofa who yells at his favorite football team for not being competitive. Take another munch of your Fritos, Rusty. You can't see the forest for the trees.
With much affection and endless hope for those who can't see through the dirty window panes of their own bias. Next time you're driving down the street to your house, or you take that once-a-week shower that you need, or the fire department rushes to your neighbor's house, or even your kids read something for you (or correct your poorly added math!), remember that it's GOVERNMENT who provides those services.
When you swig down that Pepsi, pump that $4.00/gallon gas into your Roadhog truck, or suck up that triple whopper sandwich or run away from the madman in the parking lot brandishing a handgun, THAT'S the private sector for you! You think THEY'RE giving you a bargain, and think that the government is wasting your money. Ha! Ha!
Well, I've got WD40 for your "Rusty" hinges because you're really starting to squeak.
I think 'Master C' is just joking around in here. If 'Master C'ommunist here likes the government so much, then he or she should marry it.
On the other hand, we need some liberals like him or she on these posts. Although he seems more like a Statist, big-time Socialist or Communist to me. We can't always have just Libertarians doing the reading and the writing. There are too manyu of us here. Keep on writing Master C. Its good to read different views in here even if we don't agree with them.
My appologies to Rusty. Although I disagree with 'Master C'ommunist comments, his WD40 joke made me laugh. It was a good one.
Well, I use my given name, so the WD-40 comment has been coming in my direction since kindergarten, so the humor has worn itself rather thin in the last 28 years since then.
That said, I sincerely hope that Master C is, in fact, joking around. I get the feeling that is the case being as how he can't seem to get off the idea of not lowering taxes. His preoccupation with (hopefully) tongue-in-cheek rhetoric favorable to highway robbery by the federal government is where the real humor lies.
Master C, every article I read from you is good for a chuckle, as well as reminding me that, in spite of the good-natured satire (I hope), there are people who do, in fact, subscribe to the literal meaning of your words, and that is sobering...and sad.
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