I am almost half way done with my first block of classes for this semester. I am taking an Economics class, which seems rather timely considering the current state of affairs on Wall Street. I guess I am just a complete capitalist. I am not really happy with the idea that tax payer money is bailing out these businesses that were plagued with incredibly poor and shortsighted management. It is quite troublesome to me that the federal government feels like it needs to take over the industry. I can’t see any reason why the banking market would benefit from a government takeover; didn’t we just finish de-regulating this industry? I think that they should just let them crash, that is how the market stabilizes itself, it purges out those greedy institutions. I think it would be sad for all the investors that had stock in those institutions, and unfortunate for the good employees of those banks. But, that is how the market works, investors are expected to complete their due diligence prior to investing and employees who are not responsible for the catastrophe are nearly always employable by competitors. I know I am heartless and cruel, but I guess I just think that is the way it is. This is where I draw a stark contrast from Barak Obama, who would like to blame the capitalist market for the troubled financial market. I can’t stand that blame game, why can’t it be the financial market’s fault that they got into that situation? Why should taxpayers have to pay for a bloated governmental institution to oversee these markets? What ever happened to the ideals that Democrat JFK was famous for “Ask not what your country can do for you, but what you can do for your country.” Obama certainly does not prescribe to this doctrine; he seems to think that somehow taxpayers (who he has classified as the rich) are somehow responsible for the non-taxpayers. I can’t stand this shift in responsibility. I’ll tell you who I am responsible for, myself and my family, nobody else. Now if I someday become independently wealthy I think it would be in my best interests to contribute to the well being of
Bailouts reward bad behavior; it sends a message to CEOs everywhere that this bad behavior and poor management will not have negative consequences. If the government wants to help out an industry they should create positive incentives, not bailouts. If they want to improve the efficiency of cars they should provide incentives for businesses that create more economical cars, they could create a competition (similar to the Virgin Records Airplane to the Moon). The bailouts and tax penalties work in the wrong direction; it puts the focus on the negative behavior rather than on the innovation and positive behavior. The best thing the government could have been doing during these times of “lax regulation” is to have provided incentives to those financial institutions that were willing to meet certain criteria, including making proper disclosures and maintaining adequate capital. It would also help the less educated masses gain a little transparency as to the legitimacy of the firm they are considering investing in. This method would give an incentive to operate an institution within the guidelines without unnecessarily restricting the market. The reason I am so vehemently opposed to market regulations is they discourage innovation. Discouragement is the nature of restrictions.
Here is the problem with my proposition. I think it kills the current legislative branch, no longer would they be spending time figuring out how to word the bill so that it would restrict a very specific action, no longer would they be accepting bribes from companies or lobbyists trying to undermine the system (unless they were for less than the potential gain of the company), and it would require them to actually be creative in how they formulated incentives. I have already voiced my opinion of the Pork and Barrel spending in politics, I think its garbage, if a bill can’t be voted on its own merit then don’t vote on it at all. I am opposed to personal income tax because it undermines one of the basic building blocks of this nation “no taxation without representation” when is the last time we got an update on how and where personal income tax is being spent? This doesn’t apply to businesses so I don’t have much of a problem with that. Property taxes are accounted for; sales taxes are accounted for, even fuel taxes are accounted for. I don’t have any clue what the number is but I would venture to guess that if we eliminated Pork and Barrel spending entirely we would have a national surplus within a year maybe two. Of course then we will have these special interest groups that would go un-funded. Based on their inability to draw up financial support from the community, maybe they should stay that way.
Well that’s probably enough for this week or so… By the way if you have money invested in the banking industry just remember, buyer beware.
1 comment:
Everyday I get madder at the Federal Government. How can people blame capitalism for all our problems anyway? Ever since the creation of the Federal Reserve, we've had some hybrid of a free market with regulations. We don't even know what it would be like to live in a completely free market. We haven't had one for a century. And, while I am on that note, until the Federal Reserve was created there was almost no inflation for 200 years. Since its creation, how much has inflation grown? I don't even know, but it grows exponentially. I wish the public were more informed of this matter. We'd really be asking less of our government because all they do is screw things up. And, no, I don't feel strongly about this :)
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