Wednesday, November 12, 2008

Bail-Out Turn-About

In a move that should surprise no one, Treasury Secretary Henry Paulson today back-pedalled on the centerpiece of the Bush Administration's unConstitutional bail-out for irresponsible banks and borrowers. With $700 Billion bilked from the taxpayers in hand, Secretary Paulson has decided that, well, buying troubled assets isn't such a good idea after all.

Let's recap:

At the end of September, Mssrs. Bush and Paulson painted a doom-and-gloom scenario where everybody's ability to borrow money for houses and flat-screen TVs they couldn't afford was in jeopardy.

The situation was so bad that we didn't have time to consider free-market alternatives that might actually address the root causes of the newly discovered financial crisis. No, no, no! Taxpayers had to cough up $700 Billion immediately.

Why $700 Billion? "It's not based on any particular data point," a Treasury spokeswoman told Forbes.com. "We just wanted to choose a really large number." Well, they succeeded there.

House Republicans balked, and briefly staved off Leviathan. The Bush Administration kept up the doomsday talk; some compromises were reached; the Senate caved, and the House followed suit.

And now, the "really large" plan that was so important we didn't have time to think it through isn't such a great idea after all.

So is the government going to give the money back to the people who earned it? Don't be silly. The Administration is launching a "broader campaign to bolster the financial markets and ... make loans more accessible" to people who want to purchase cars or other items they can't afford. Oh, no.

Now, if the Administration has decided not to spend the tax-payers' money on bad investments, that's a good thing, as far as it goes. Using it on a vague campaign to encourage greater debt, on the other hand, is a bad thing.

But more to the point, the Administration should have considered its proposal thoroughly, and allowed Congress to do the same, before foisting it on the productive citizens who have to pay for it.

Part of the mystique used to market the bail-out was that such government meddling would somehow restore public confidence. This Ready-Fire-Aim approach does the opposite.

2 comments:

Justin Kownacki said...

And we re-elected most of the Senators who voted for that bailout, didn't we? Once again, we get what we deserve... Oy...

Jim-the Classical Liberal (Views from the Right) said...

All hail King Henry. I wonder who will be the new economic dictator under the Obama administration. It may be time to consider sharpening the pitchforks and taking Capitol Hill.

I hope this run to socialism and nationalism (which is more than likely to continue with President Obama and the leadership of Pelosi and Reid) will result in a huge backlash that sees a resurgence in conservatism in 2010 that makes 1994 look like playtime and the rise of a true conservative leader in 2012 that makes good on the promises that Reagan made but was unable to get (due to the Dems in Congress).

A true move to SHRINKING THE SIZE OF GOVERNMENT would be welcome indeed.

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