Stay in Jail! No Bail!
Marina Shmidt
Issue date: 5/5/09 Section: Opinions
Government bailouts are simply stupid and irresponsible. They will produce incompetence and higher taxes for years to come.
I take the extreme position that not a single company should be bailed out. The truth is that this financial crisis is everybody's collective fault, and now we have to pay the price for it. If you bought something on your credit card that you could not afford, it is your fault. Banks are at fault for giving loans that could never conceivably be repaid, like a million dollar loan to a person who has no job so that he or she can buy a mansion, renovate it, and flip it for two million dollars. Guilty? Most of the executives on Wall Street, CNBC, The Wall Street Journal, most economists, Democrats and Republicans, Clinton, Bush, Greenspan, Paulson, and, soon to be guilty, Obama.
There is a lot of blame to go around, but there should not be bailout money flying around. If there are bailouts, then everyone should qualify. The criteria for receiving a bailout should not be that the bigger you screw up, the more money you get. We had a huge boom, and now there is a bust. That is the natural cycle of capitalism. If we avoid the pain of this bust and do not correct the fundamental problems in our financial behavior and financial institutions, then there will be no gain. The brilliance of capitalism is the humbling self-correcting mechanism of the market. Rather than use bailouts to maintain flawed institutions, we should allow capitalism to work its course.
If the government simply throws taxpayer money at the problems, nothing will be resolved. Doing that has never worked! Americans pay more per capita for healthcare and get worse results. Americans pay more per capita for education and get worse results. Taxpayer money is not the solution to our problems. These policies lead me to the stimulus plan. The government wants to hire people to build things. It is not in the taxpayers' interest for the government to create jobs, because taxpayers pay these new employees' salary. Therefore, if the government hires three million people to work, the American people must pay three million more people's salaries. The less private employment available, the more the tax burden will be increased in order to subsidize all these new public jobs. I am no Paul Krugman, but would it not make more sense for the government to spend the stimulus money by lending money to private firms-since banks are not in the position to do so-so that they can expand and create more private sector jobs?
I take the extreme position that not a single company should be bailed out. The truth is that this financial crisis is everybody's collective fault, and now we have to pay the price for it. If you bought something on your credit card that you could not afford, it is your fault. Banks are at fault for giving loans that could never conceivably be repaid, like a million dollar loan to a person who has no job so that he or she can buy a mansion, renovate it, and flip it for two million dollars. Guilty? Most of the executives on Wall Street, CNBC, The Wall Street Journal, most economists, Democrats and Republicans, Clinton, Bush, Greenspan, Paulson, and, soon to be guilty, Obama.
There is a lot of blame to go around, but there should not be bailout money flying around. If there are bailouts, then everyone should qualify. The criteria for receiving a bailout should not be that the bigger you screw up, the more money you get. We had a huge boom, and now there is a bust. That is the natural cycle of capitalism. If we avoid the pain of this bust and do not correct the fundamental problems in our financial behavior and financial institutions, then there will be no gain. The brilliance of capitalism is the humbling self-correcting mechanism of the market. Rather than use bailouts to maintain flawed institutions, we should allow capitalism to work its course.
If the government simply throws taxpayer money at the problems, nothing will be resolved. Doing that has never worked! Americans pay more per capita for healthcare and get worse results. Americans pay more per capita for education and get worse results. Taxpayer money is not the solution to our problems. These policies lead me to the stimulus plan. The government wants to hire people to build things. It is not in the taxpayers' interest for the government to create jobs, because taxpayers pay these new employees' salary. Therefore, if the government hires three million people to work, the American people must pay three million more people's salaries. The less private employment available, the more the tax burden will be increased in order to subsidize all these new public jobs. I am no Paul Krugman, but would it not make more sense for the government to spend the stimulus money by lending money to private firms-since banks are not in the position to do so-so that they can expand and create more private sector jobs?
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