Posts Tagged ‘education. opinion’

Gold Rush! Cash in while you can!

November 14, 2008

The continuing debate over the current financial crisis aside the dash for the latest government gold rush appears to be in full swing. Government policy started the crisis, not the so-called free market. Now, the government seeks to make matters worse while appearing to make life better. At least for those that have the ability to contribute the millions that it takes to stay in elected office.

When governments attempt to “fix” economies by meddling with the free markets that power them, these would-be market-driven economies become political footballs. Economic decisions that would have been fairly and justly arbitrated by unbiased, natural laws of economics become decided on purely political grounds. Markets lose stability in direct proportion to the extent of such meddling. This is certainly the case with the government “fix” known as TARP, or Troubled Asset Relief Program. The bailout package was originally crafted to relieve banks so that they would remain solvent, preventing further meltdown of the U.S. economy. But with $700 billion up for grabs, TARP’s original purpose was thrown under the bus in the gold rush that ensued. Now everyone wants in on the government’s largess, and markets have reacted accordingly. And why not? Why shouldn’t we all line up to “get ours” if the government is giving away “free” money? Sadly, this seems to be the new American corporate mindset.

Insurance giant AIG, for instance, is now slated to receive more than $150 billion in the largest single bailout allotment from TARP thus far. The government effectively nationalized AIG in the process, establishing a $40 billion stake in the world’s largest insurer. Eager to get in on the TARP lottery, American Express — that’s right, the credit card company — is apparently also now a “bank,” having been so blessed by the Federal Reserve. Evidently unaware of AMEX’s subtle approach, one draping the hat-in-hand recipient in “bank-like” trappings, U.S. automakers are pursuing more blunt-instrument strategies. Their game plan? Simply demand funds from Washington on the basis that, well, they need the cash, and everyone else seems to be getting an awful lot of it lately. Perfect.

The government has committed $290 billion so far without any oversight because Congress has yet to fill the positions it created. Somewhere in all of this thrash for cash is a lesson about the proper role of government in a free market economy. We just hope that this lesson hits home before The Great Depression, Part II does.

source: Patriot Post

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