With the economy being the way it is right now, the last thing we need is nationalization of industry. In capitalism, if a bank fails and goes bankrupt, another one is sure to buy it up and practice more sound management policies so they can stay in business. At least that is how it is supposed to work. With the Chavezism of grabbing up failed firms and businesses, it'll only keep the power of failure intact (especially when Big Government is backing it all and taking more of your money to finance it).
It's like a 16 year old kid that just got his license being handed over the keys to Dale Earnhardt Jr's car to race it at Daytona. The government has no business meddling in the affairs of the private sector especially when there is hardly a former CEO or business owner in the new administration with no executive experience.
It's all a ploy to have government in charge of industry. Just as the cap and trade program Nobama wants is due to bankrupt the coal industry and how the Dems propped up failed mortgages that killed the housing boom, this is a sure plan for Epic Fail. We're talking about the same people that have taken our money for decades now to put in Social Security and have nearly bankrupted that, yet we want to give them more power and more money to mismanage? This should have no place in our Republic as was said by Jefferson over 200 years ago.
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labour and bread it has earned - this is the sum of good government"
The Founders ought to be rolling over in their graves over what we have leading the nation today.
4 comments:
Can you find 5 professional economists who agree with you, that the largest banks in the US should have just been allowed to fold?
Would you agree that these "banks too big to fail" were too big? This is the problem with unrestrained monopolistic behavior on society-critical needs.
Imagine if all the electric companies were going under, should the gov't step in?
Anonymous, your question ignores a bigger question, one that is at least tangentially addressed in the original post. Is it worse to allow these large banks to fail, than to pump taxpayer funds -- coerced by the state from its own citizens -- into failing businesses? It seems likely that these businesses will fail anyway since the problems that created their dysfunctional condition are not corrected simply by the infusion of taxpayer supplied capital.
"Too big to fail?" Just what does that mean? First, I would argue that businesses like these banks can't get that big in a really free market environment. They can only get that big if there are barriers to competition, such as the existence of favored relationships with the central banking system. Oh, did somebody mention Bawney Fwank, or Chris Dodd? Second, if being that big is that bad, then they need to fail, so that the market (and apparently, the government regulators) can identify the causes of the "problem" and correct them, resulting in what you apparently hope will be smaller, less oligarchic banks.
What is a bank, besides a balanced system of deposits (loans to the bank) and loans to financial consumers representing accounts payable and accounts receivable. The value of those accounts may be somewhat affected by a failure -- a bankruptcy -- but if the process for transitioning the accounts to a new owner through the supervision of the bankruptcy is managed properly, the impact on both sides of the ledger should net out pretty close.
One problem with our modern culture is the expectation of returns with zero risk. There is always a risk, always a day or reckoning. Either we deal with that as free capitalists, or else we live in denial and with drastically reduced liberty and opportunity as socialist wannabees.
To paraphrase Dead Fish Emanuel, Never let a crisis go to waste by failing to make the crisis permanent.
Look, anonymous drone. It doesn't matter if the banks go under. You don't think as long as capitalism and the free market are allowed to go as they do, that another bank wouldn't buy it up and go from there? If you're worried about your savings, don;t worry. We already have the FDIC that insures your savings to buy a new hooka and X Box game are there.
The entire banking crisis was caused by Congress bending banks over a barrel and forcing them to give out loans to people who were high risks to "be fair" .So tell me why it is a good idea for the federal government (whose only except for running a decent program so far has been the military) can do a better job than the private sector. Especially in light of that fact, Anonymous drone?
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