rcomment

No Happy Endings in the Credit Crisis

Talking about WEEDING out, Nov 4th is coming soon, WEEDING out our current elected could do the USA and the World a lot of good. Time in office (Experience, tenure) has not done us much good in which ever direction you look. A new House,Senate and Administration would be welcome in my book.


On Sep 20 12:18 PM bowman711 wrote:

> What else would one expect from a Government that thinks the solution
> to every problem is to spend money, whether it has it (from taxes)
> or not? What's a few billion dollars if it saves Bear Stearns?
> What's a few hundred billion (possible trillion) dollars to bail
> out Freddie and Fannie? What's $84-billion dollars to save AIG?
> What's umpteen-squillion dollars to save the 'financial system' in
> the Mother of All Bailouts?
>
> You know, we often talk about a correction in the stock market.
> A correction is needed to weed out inefficient and poorly run companies.
> It may also be needed to weed out obsolete industries. But, what
> has been corrected so far? A few small banks have been weeded out.
> Lehman Brothers has been found wanting and is now gone. A few other
> inefficient or poorly run companies, such as Bear Stearns and Merrill
> Lynch, have been merged with other companies. However, the vast
> majority of troubled financial companies have been preserved. Or,
> maybe it would be more correct to say that their structural dry rot
> has been papered over with newly printed dollars so they look just
> fine. But, the underlying problems have not been dealt with properly.

>
>
> How many inefficient and poorly run Government programs or agencies
> have felt the pain of a 'correction' and been eliminated? One can
> hardly think of any. So, when the Government steps in to 'save'
> the financial industry, why would anyone think it would do any different
> for industry than it does for itself? So, Congress stays in session
> to do what in knows best, to cobble together a rescue package costing
> additional hundreds of billions of newly printed dollars. Like they
> do with obsolesce or inefficiency within the Government, they are
> frantic to preserve the status quo.
>
> The free market system has natural and proven way of dealing with
> bad businesses - bankruptcy. If the Government is going to intervene,
> what Congress should be doing is developing a way of identifying
> the financial firms that need to be eliminated and cutting out the
> dead or dying financial 'tissue.' Either way, to cure the patient,
> it would be painful. As long as the Government chooses to paper
> over the financial 'patient' with dollars, we might have a pretty
> looking financial system patient, but it is still sick and maybe
> even dying as we know it now.