Written during the 'fail' out, still trying my hand at political commentary
|Let Them Fail
or Capitalism Not Socialism
Earlier this year, the Congress approved an economic stimulus plan for the American taxpayer. Now, against the wishes of those same taxpayers, the very people for whom they work, this same Congress has approved what amounts to the same thing for billion dollar banks, insurers and other financial institutions to the tune of 700 billion dollars (not including the 140 billion in pork spending that has been added).
This same august legislative body that failed to act several years ago (led by the same politicians who blocked the necessary actions by the opposition that could have headed off the very crisis we are currently enduring) has been convinced by corporations and other entities that they need to be rescued from their own avarice and indeed their own stupidity.
The government plans to buy sour mortgages from these self serving institutions to allow them to loan money again. That is like buying a new speedy sports car for a teenager after he has wrecked his first speedy sports car. Congress is enabling these companies to do exactly the same thing and repeat their errors and bad judgment.
Let’s look at this from a smaller economic perspective:
If I go to my local bank and ask to borrow money, they may or may not loan me that money based on my ability to repay the loan. If I receive the loan and do not repay it, I lose the collateral I pledged against the loan. If a company makes a bad decision and shows poor judgment or over extends their credit and cash flow, that business will fail and then no longer exist. That is the way it works, very simple. It’s called capitalism. The market reward sound practices and removes those who do not demonstrate sound management or judgment.
In the present difficulty, the Congress and President have decided that the best way out of this crisis is to socialize the banking industry; that is to basically have the government take care of the bankers. Not loan the money to the banks as in the case of Chrysler years ago (which Chrysler paid back early through the sound judgment, innovation and inspiring leadership of Lee Iacocca), but buy the banks’ bad mortgages, thereby absolving them of their bad decision making and bad products.
Lehman Brothers, one of the bloated investment banks, handed out over 5 million dollars in bonuses over the past year to its obviously inept executives. Now it’s in the forefront of these billion dollar losers with their hand out, wanting public funds from working folk to rescue them from the results of their sickening greed and foolish practices.
What these banks and investment firms deserve and need is a capitalist spanking and to let the market weed out those who cannot weather the storm they’ve created. They deserve to fail.
They made the mistakes; they made bad loans; they turned out an inferior product. Let them fail. They deserve to have happen to them what would happen to those on Main Street, America in the same situation. Let them fail. That is the natural result of poor judgment, poor leadership and poor business practices in a free market economy. A free market economy will correct itself. When government interferes on a scale as gross as we are seeing now, the problem is not being fixed nor even patched. All that is being demonstrated is the gullibility and political desires of those we have elected to represent us in our government. After first listening to their employers, they have moved on to saddle the American taxpayer with one more bill that will probably never be paid.
To add insult to injury, the same people that this is intended to help (the banks, their friends on Wall Street and the speculators who artificially drive up the price of oil and therefore gasoline and other commodities) are now saying that 700 billion dollars will not be enough to correct the problem. Of course not; no amount of money is enough to cure stupidity. The more money handed to them, the more that will be desired. Money is their drug and Congress is their dealer and their enabler. The only cure, the only way they will learn is to let them fail.
Let them file for bankruptcy; let sound, well managed companies take over and fix the bad ones. Keep government from bailing out bad institutions that are where they are through their own foolishness. Keep our markets and economy free and capitalist, not socialist.
Let them reap what they’ve sown; let them lie in the bed of their making; let them pay their fiddler.
Let them fail.
Copyright © 2008 Shawn R Thornton