People Win, Unions Lose. No Bailout!

Where have these Reagan Republicans been hiding for the last 20 years or so. Last night we finally saw a little glimpse of them. Democrats deserve credit for this one too.

Bailout Failed!
Bailout Failed!
Bailout Failed!

At least, for now. Once the new year starts I guarantee this will be brought back up. That's how bailouts work. Once there is talk of bailout people tend to expect that it will happen. Looking at it this way, if somebody was pondering whether to give you a million dollars or not you would already be planning on what you will spend that money. You might even make some decisions as if you know for sure you are getting the money. Same thing with business. Once somebody in government mentions bailout it creates a great deal of market volatility because investors willing to bet on a bailout buy stock hoping that a huge infusion of cash will make the price of the stock go up.

I say stop the madness. This government was already part of the biggest government intervention scheme in history. How many more corporations does the government need to control for people to realize whats going on? The government sets up Freddie and Fannie. Then they allow dishonorable and not very bright people to run these two socialist companies. These companies have advantages in the market place other companies do not have because they are partially government run. Finally the government allows these institutions to buy bad loans from almost every bank.

WHAT DID YOU THINK WAS GOING TO HAPPEN!!!!? Fannie and Freddie got stuck with a bunch of sub prime loans that people were not paying. Had these people been properly screened they wouldn't have had those loans in the first place. By the way, during this whole scenario the government was forcing banks to lower lending standards and the President was pursuing weak dollar economics.

The whole point I'm trying to make is that when government gets involved in matters it knows nothing about you will have negative results. If I was a social worker all of the sudden I had full control over which businesses fail and which succeed and once I decide which get to succeed I get to run the businesses. Do you think I would be successful? I mentioned this in an earlier post, if politicians knew how to run businesses better than businessmen and businesswomen then they wouldn't be politicians. Remember CEOs make millions and politicians make thousands.

When individuals, households, and small businesses fail that's it. There are no bailouts for us, there is only restructuring (redo the family budget) and/or bankruptcy (IRS takes your house, car, etc). Think about this. Say you have some bad luck and get laid off. You have house payments, and other bills to make and it becomes too much so you file for bankruptcy. They will come and take all your valuable assets, freeze your accounts and investments, and pretty much drag your name through the mud. Then the government takes all your stuff and sells it, takes the money from the sale and gives it to a multi billion dollar corporation because they are about to go bankrupt. Why didn't you get a bailout? Are you or is your business really that meaningless? The government has no right to decide winners and losers. That's the job of suppliers and consumers.