The Bush administration is pushing for a $1 trillion-plus blank check – $700 billion just to buy bad mortgages – to bail out financial and other segments of the economy, complete with czarlike powers for the treasury secretary. This president has expanded the government by a greater percentage than LBJ, has created massive new entitlement programs, has further centralized education in Washington, D.C., and has advanced novel theories of executive privilege that obliterate some of the key checks on the centralization of government power crafted by the nation's founders.Via RealClearPolitcs!
Can we at least dispense with the silly rhetoric and admit the obvious? This administration does not stand for limited government, the Constitution, fiscal responsibility or free markets. The last point is crucial. Supporters of free markets believe that government should enforce some ground rules, but that companies should compete with minimal intervention. Businesses are free to make an enormous amount of money, of course, but they also must be free to fail. Yet the administration has pushed one set of market interventions after another, and when big companies fail, it is quick to turn to you, the taxpayer, to cushion the blow. That's not capitalism, unless one sticks the word "crony" in front of it.
With the meltdown in the financial markets, these Republicans are advancing a plan to throw an enormous amount of taxpayer dollars at the problem, and Democrats are busy gloating. "You see, unfettered capitalism is a failure! We need more regulations, more government, more control." It's absurd to argue that any market in the United States is unfettered or free of regulation. And it takes a little bit of time to explain how past government interventions have led directly to the current meltdown that Americans are experiencing. The only complaint by Democrats, by the way, is with some of the details, and, of course, Democrats were most eager to push the "everyone deserves a mortgage" mandates that led to this mess in the first place. Not that "compassionate conservatives" complained about this at the time.
Fortunately, there are still a few sane voices out there. Somehow, congressional Republicans have regained some of their backbone. Some are opposed to the bailout plan. Here is Sen. Jim DeMint, R-S.C., speaking about the fundamental problem with the Bush bailout: "There are much better ways of dealing with this problem than forcing American taxpayers to pay for every asset some investor doesn't want anymore. We should start by reforming government policies and programs that created this mess, including the Federal Reserve's easy-money policy, the congressional charters of Fannie Mae and Freddie Mac, and the Community Reinvestment Act. Then Congress should pass a number of permanent and proven pro-growth reforms to encourage capital formation and boost asset values."
My belief is that business that either engage in bad investments or bad business should fail. I trust a businessman (or businesswoman) to know whether they should tread into dangerous territory or not. Subprime loans from the little I know seems risky especially if you help people get mortgages they either don't qualify for or can't afford them. Why should a government help pull a business from failure especially if it was their fault?
The best case scenario for this is that well there should be some reforms. Perhaps the US Government shouldn't be so interventionist, but at the same time we now know that we should give people loans they can't afford to pay back. Perhaps government policy shouldn't entail helping people buy a home. It looks like for some it wasn't YET in their interest to buy a home. It's a mess folks!