The Politician Bailout Plan

What we're witnessing in Washington this week is not a Wall Street bailout, it's a bailout of the politicians. The members of Congress are afraid, and they should be, that if there is a major near-term meltdown of our economy most of them won't be elected the next time they're up for re-election. They prefer that the economy be dragged down gradually over several years so that it won't be so directly linked to them.

Make no mistake about it. It's a zero-sum game. The economy has already taken the hit; we just haven't seen all the effects yet. The question is do we want to take the punishment now or do we want to spread it out over time? I say take it now. Let's gulp down the medicine and get on with the healing.

Let the weak companies fail. Let the strong (or new) companies step in to take their place. Put more weight on what the economists who don't have strong ties to Wall Street have to say than on what Wall Street executives and former executives have to say.

Let those who bought more house than they could afford lose the house. Let the lenders who gave them the opportunity lose their money. Rescind the laws that encourage bad lending practices. The worst thing we can do for the economy is to endlessly continue to prop up bad decisions.

I heard Senator Barbara Boxer this morning mock John McCain for saying last week that the fundamentals of the economy are strong. I don't know if she was just being political or is dumb enough not to know that McCain is right. I suspect the latter. I suspect she doesn't understand that the fundamentals of the economy are the skilled workforce, the capital infrastructure and the entrepreneurship that exist in this country. I suspect that she thinks it is the amount of control the government has over the economy.

The fundamentals are going to still be there whether Wall Street crashes or doesn't crash. We will bounce back if the government will get out of the way. I prefer that we start the bounce sooner rather than later.

Comments

Make a comment: