Right now we are facing a terrible, but necessary, market adjustment. A free world will not be without its winners and losers.
Both Barack Obama and John McCain are quick to blame “greedy executives,” “self interest,” and “lax regulations.” The solution they propose: more oversight, more bailouts, and more government interference in free markets. Its quite ironic because the Federal Government is running a 419 billion dollar deficit and american taxpayers are liable for 59 trillion dollars of entitlements. Where is the regulation and oversight for the guys who make the rules? You still sure those t-bills are risk-free?
Meanwhile, policy makers fail to realize that government action will merely prolong or worsen the inevitable market adjustment. Taxpayers are now directly responsible for assuming the debts of private institutions and the losses of private shareholders: Bear Stearns, Fannie, and Freddie.
Far more insidious than this, however, is the fact that Americans are still on the hook for today’s Lehman blowup. While the Treasury secretary says the government will not be buying the Lehman assets or assisting in a sale, he did not mention the esoteric fact that the Fed has pumped almost 70 billion new dollars into the economy. But where did this 70 billion dollars come from? It was printed out of thin air, so to speak, released by devaluing the US currency through increased inflation – which means all imported goods from t-shirts to televisions will rise in cost.
Welcome to the (corporate) welfare state – hope you enjoy the next 8 years of it. But I forgot – Obama and McCain aren’t like the rest, right? They are changers and hopers and reformers and mavericks.
With this all star cast in 08, “hope for change” is truly an audacious proposition.
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