Going downhill fast

I didn’t vote for Obama (I voted Libertarian this year) but I was hoping Obama would be an inspirational President who wouldn’t actually do much – because I don’t think the government should do much.  I was really hoping that there would be Republican control of the House and Senate so hardly anything would get passed.  Gridlock is good!

In my (admittedly minority) view, the government should basically do what the Constitution says it should do – and no more.

That pretty much boils down to protecting us against foreign invasion via the military, protecting us from domestic violence via laws and police, and providing impartial courts to mediate when there’s a disagreement about (or someone violates) the laws.  That’s it.

Viewed in that light, Obama isn’t starting off very well because he’s pushing increased spending and increased regulation.

According to a story I just read on Yahoo News, President Barack Obama issued a withering critique Thursday of Wall Street corporate behavior, calling it “the height of irresponsibility” for employees to be paid more than $18 billion in bonuses last year while their crumbling financial sector received a bailout from taxpayers. “It is shameful,” Obama said from the Oval Office. “And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility.”

I agree that it’s shameful to pay out bonuses (or buy a new corporate jet) when your company needs billions of dollars of taxpayer bailouts just to stay in business.  So far, I’ve got no problem with what Obama says in the story.

My problem is that Obama is pushing for another bailout package in excess of $800 billion.  These are private companies, and they shouldn’t be receiving taxpayer money unless they’ve won a contract to provide a product or service in exchange for that money.   And the government should have no say in how much profit, or how big of bonus, the companies make.

He also successfully lobbied for Congress to spend $350 billion for bank bailouts just last week.  If he really wants companies to “show some sense of responsibility” why is he giving our tax money to the most irresponsible banks and companies?

I’m getting the feeling that Obama wants to have his cake and eat it too.  He wants to decry the irresponsible spending, lending, and investments these companies have made – while simultaneously giving those same companies more money – and cajoling them into spending, lending, and investing more.

You can’t have it both ways Mr. President.  Borrowing more money (and encouraging consumers to borrow more money) is what caused this mess.  Encouraging them to borrow and spend more will not solve it.

What will clean up this mess?  Time.  Let the bad companies and individuals who borrowed more than they could afford go broke.  Let them disappear.  The capital that was invested in them will disappear also.  Those companies and individuals who conserved their capital will get some great bargains and will start rebuilding the economy on a solid foundation.  This will happen eventually anyway – but the longer we delay the painful process of debt destruction, the harder the inevitable crash will be on everyone.

gk

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One Response

  1. Should recipients of taxpayer favors continue to send jobs offshore?

    http://pacificgatepost.blogspot.com/2009/01/should-bailout-beneficiaries-be.html
    – –
    Where are the controls?

    Where is the common sense?

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