Tuesday, September 30, 2008

No Bail Out deal needed

WHY we don’t like the bailout.

It’s not about executive pay, or golden parachutes.

It’s not about keeping families in their homes. Most of us are making timely payments.

It’s not about having “taxpayers” (read - the Federal Government) see a return on their “investment”.

It’s not about oversight.

It’s about forcibly taking money from everyone else, and dumping it on those who have proven themselves to be terrible stewards of it. But more than that, it’s about the Constitution. You just can’t take public funds like this for the benefit of private companies. (Well, you’re not supposed to anyway.) It’s about personal responsibility and the free market. It’s about still having the possibilities of success and failure in our society.

It’s about nothing less than our way of life. In our way of life, if someone doesn’t pay their mortgage, they get foreclosed on. Then housing prices come down to reality and more homes they CAN afford become available. In our way of life, if banks take risks that don’t pan out, they fail, and another bank that is doing a good job buys their assets, hires their employees, and makes profitable use of them. That is how a society thrives, and why bankruptcy and foreclosure need to happen sometimes. Because in the end, the good guys can win.

Yes, we need change, but the change we need is to get rid of the perverse government incentives for banks to make those bad decisions in the first place. But all we hear about is band-aids, symptoms, and bedtime stories about how this will fix everything.

It won’t and it comes down to this: You can save the banks that are failing, or you can save the dollar. But you can’t save both.

Source: Ron Paul Campaign for Liberty: http://www.campaignforliberty.com/blog/?p=609

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