Now for the politics: I am afraid. As stated in one of my earlier columns, it seems that President Bush is going to be remembered, not for his foreign affairs achievements, but for his move away from the free market and into European style socialism. Apparently, we didn’t even have to wait for President-Elect Obama. We are getting it right now. And boy, are we getting it hard!
Last week, the final nail in the coffin of a free market, was hammered. President Bush decided to give our friends in Detroit approximately 17 Billion Dollars. Of course, there were many strings attached to this bailout. For one, the auto companies must prove they are competitive and on the road to profitability by the end of March. Secondly, the UAW must agree to substantial concessions; these include elimination of the jobs bank and acceptance of company stock instead of cash into the legacy plans. The UAW has already said that they will appeal to the incoming Obama administration to lessen these concessions. Based upon Obama’s love for the unions, I am sure that all of the demands on the UAW will quickly go away.
The part of this bailout plan that scares me the most is that the US Government could actually be purchasing shares in the auto companies as part of the plan. Since when does this government own companies: since, maybe October or November. It started with AIG and since then has gone on relatively unabated. Don’t you want to own GM? Especially in light of the fact that the government ownership will dilute the stock so much that some stock market analysts are saying that GM stock could become worthless.
Didn’t we fight a cold war so that this type of socialism would not happen? Didn’t Ronald Reagan do everything in his power to de-regulate so that we would actually have a free market? And, lastly, how can Mr. Bush be happy that this will be his legacy. Wouldn’t he rather be remembered as the man who kept America safe after the biggest attack against the continental United States in its history?
Secretary Paulson has spent the bailout funds without any checks and balances. The banks have received billions of dollars and just yesterday we discover that more than one billion has gone to bank executives. These are really people that need money. Maybe another week in Palm Beach can be paid for by the taxpayers? Wasn’t this money supposed to be used to loosen up the credit markets? That obviously hasn’t happened. Money is tighter than ever. And, the housing market continues its spiral downward. I agree that Secretary Paulson will probably go down as the worst Treasury Secretary in history. He has completely bungled his way through this economic downturn.
Now, the bailout fever has reached a new high! Even casinos are seeking bailout funds. Why shouldn’t they? We are giving the money to everyone else. I guess when Secretary Paulson decides to give money to the casinos which are suffering their worst economic turndown ever; the next people with their hands out will be organized crime. They probably can’t collect on their loans either. If Paulson gives them money, maybe it will result in a few less broken legs!
The bottom line is that the bailouts have got to stop. We cannot continue to print worthless money and give it to businesses that don’t deserve it. The economic cycle must play itself out. If that results in a few bankruptcies so be it. No one is going to save the mom and pop restaurant owner, why should we save some mega corporation with overpaid executives. Once this economic cycle completes itself naturally, growth and jobs creation will return. This country survived the Great Depression. It can survive this. Let’s keep the free market. It’s the only way to ensure long term growth and the creation of wealth.
I probably should have started this column by saying, “I am angry.” The proper word is not afraid. I am angry that President Bush has bailed out the failing auto industry. I am angry that President Bush has abandoned the free market. I am angry that President Bush’s legacy will not be his foreign policy achievements, but his cave-in to the left in the final days of his presidency.
In closing, I, again, wish you all a Merry Christmas and a great 2009.
© 2008 Frank T. DeMartini – All rights reserved. Permission to be copied will be granted freely upon request.