Is the reason for this Wall Street bailout to make taxpayers money? See the immediately previous entry, which explains that this bill was sold as a means of preventing economic Armageddon, at the cost of spreading extreme fear throughout this country, Wall Street and the world.
Yes, I know that the political "promises" to avoid cost to the taxpayers were meant as propaganda, just to get the bill passed, and to stem the public revolt brewing. Thus, we had the mainstream media, including Fox News and especially the business channels, parroting the Wall Street propaganda that the taxpayers might actually make money on this bailout.
The problem is that too many people seem to have believed the propaganda--proving they are stupid. That definitely includes Fox News, where I saw a segment this morning (in brief surfing, which always worries me because it suggests that the propaganda is being spread widely for me to happen to see it in a brief exposure) really pushing the idea that the taxpayers are going to make money on this bailout.
That is contrary to experience with the Federal Government (despite the propaganda). But let us assume that a really aggressive Federal Government, acing as sharp as Warren Buffet, might make money by buying assets really low, giving the taxpayers an ownership interest in the companies selling at the same time, and then selling both the assets and the equity interests for more money, later.
Go to the previous entry. Is it going to help Wall Street if the government imposes draconian terms, and forces true distress sales? How? Is it even going to free up credit substantially? How (it never having been really explained how this bailout is going to cause more lending anyway, except on a vague "trickle down" theory that more solvent lenders will lend more money)? How does it help lenders lend to force them to sell assets at the most depressed prices possible, and to give up ownership in the company for the privilege? How does it help stock prices for the stock market to see this happening to companies? The onerous terms negotiated by Warrn Buffet with GE caused GE stock to go down (predictably), and hurt the overall market (predictably).
The more money the taxpayers seem ready to make, themore the fundamental purpose of this bailout (to prevent Armageddon) will fail. Most likely, of course, is that trying to make the taxpayers money, and making sure that taxpayers pay only distress "market" prices, will likely both cause the bailout to fail and cost the taxpayers money.
However, let us assume that the taxpayers may make money somewhere down the line. Is that a reason to make massive government intervention in our "free" economy": to make taxpayers money? You know how we could make taxpayers more money (in the very short term, and it would have worked better early this year): Nationalize Exxon, and the rest of the oil and energy industry. Don't laugh. That is exactly what leftist Democrats like Maxine Waters would like to do She said so inc a Congressional hearing.
"But", you sputter, "that's socialism. If the government starts massively taking over private companies, we are in socialism." Exactly . That is what this bailout bill is: socialism. It is irrelevant whether the taxpayers make money or not. That (taxpayer cost) is not the only reason, or even close to the main reason, to oppose this bailout. The taxpayers can make money, in the short run, by nationalizing profitable private businesses. Don't you, as a taxpayer, want to own Google and Microsoft? However, we (supposedly) realize that the taxpayers might benefit in the very short run from nationalizing these companies, but that it will hurt the taxpayers in the end.
That is exactly what is true of this Wall Street bailout. It is socialism It will be disaster in the end. And, in this particular case, it may not work, even in the short run, and may cost taxpayers a lot of money in the short run. In fact, it is the whole idea that it will cost taxpayers a lot of money in the short run, and the only hope is to make that money back in the long run (exactly the period over which establishing this principle will kill us).
Nope. There is no excuse for this bill. Its adherents are internally inconsistent, and just throwing out propaganda in the hope some of it will stick. That includes Fox News, which pushed this bailout as much, or more, than the other cable TV networks.
P.S. I do want to announce the winners of the Flying, Fickle Finger of Fate this week, although the full entry, and award ceremony (in the imagination) will not take place until tomorrow. The winners of "the Finger" this week are: Fox News, Fred Barnes, Nancy "Total Failure" Pelosi, and Harry "Dirty Oil" Reid. If you read the above entries, and the entries over the entire week, you will certainly see why these are the winners this week. I will explicitly tell you in tomorrow's entry.
No comments:
Post a Comment