The Conservative Underground: Day 8
For today’s installment, the topic revolves around our faltering economy. But before we start, I submit this little video to make you smile.
Did you get a good laugh? I hope so! Now, onto business.
The only question I have for today: When does it stop? We’ve thrown $700 billion in unearned revenue to bail out the banking industry. AIG wants $150 billion. American Express wants $3.5 billion. The auto makers are up to, what, $50 billion? Treasury Secretary Paulson says that all but $60 billion of the $700 billion has already been committed. I guess that big ocean of cash is now more like a birdbath.
And we heard this week that Circuit City is bankrupt and closing stores and Starbucks is running into finance trouble. When does it stop? When does the government spigot of cash turn off? When does government stop interfering?
All this economic mess has one central root – government. Here’s an overview, again, of how we got into this mess, so we can see what happens when we use the arm of government to screw up the world’s greatest economy.
The Clinton Administration began with making home ownership more accessible to those who had no business owning a house and by forcing Fannie and Freddie to soften the rules, to help those less advantaged. And then, we found out that they couldn’t pay the bill (duh), but somehow, we were all told that home ownership was a right, rather than a financial privilege, as it always has been. But hey, telling the masses that they can own their own house if they just elect a Democrat to the presidency…well, hey it made for a successful campaign for Bubba.
The torch passed onto the Bush Administration, who had to deal with the dot-com bust and 9/11′s impact on the economy. From there, it took on a policy of soft-landings for every financial problem of the last eight years. Instead of spending tax money, which is the Democrat solution to these things, they borrowed against the national debt. Either way, throwing money at the problem didn’t fix the problem. What’s funny is that’s what we’re still doing!
Fannie/Freddie/Congress – This toxic relationship was one of Fannie and Freddie buying up all these bad mortgages and Congress looking the other way, even though there was warning after warning in 2004 and 2005. Congress didn’t intervene when these GSE’s went hog wild and unchecked. Notwithstanding that Congress was drunk on its own spending frenzy, this triad of “see/hear/say no evil” continued shoveling paper dollars onto a growing fire.
Of course, Wall Street kept plodding along, thinking that an infinite rise in home prices was somehow the way it was supposed to be and listening to the unholy triad of Fannie/Freddie/Congress’ lead. And after learning that they made a grave error, far later than what they should have, they ran back to Uncle Sam to save their jobs and massive bonuses, rather than taking responsibility for their ineptitude and mistakes.
If we don’t get it through our heads that every time the government gets its hands into works, it screws it up, we are in for a long long next couple years. If all of this shows anything, it reinforces what Ronald Reagan said, “Government is not the solution to the problem. Government IS the problem.”
And I just heard that, instead of the Government buying up all the bad mortgages, it’s going to buy stock in banks.
Great. That’s money that my kids will never get back.