Monday, November 10, 2008

Are We All Socialists Now?

Are We All Socialists Now?
October 10, 2008

Washington, D.C. --The Treasury Department, as part of its ongoing assumption of control over the financial industry, is preparing to inject cash into U.S. banks in exchange for preferred shares of bank stock.

“Are we all socialists now?” said Yaron Brook, executive director of the Ayn Rand Center for Individual Rights. “Have we learned nothing from the devastation that socialist policies wrought worldwide in the twentieth century? Government intervention distorts markets and causes economic dislocations, no matter whether Uncle Sam controls private companies by regulation or assumes public ownership outright.

“A crisis doesn’t transform poison into medicine. Over decades, government manipulation of money, credit, and mortgages poisoned this economy and left it dangerously weak. Now Hank Paulson and his comrades are hooking up IV tubes filled with more of the same poison--bailouts, loan guarantees, cheap money, and more burdensome regulations--and hoping we will lie still and trust in their cure.

“But the real cure is capitalism, not more doses of socialism. We should act quickly to put government in its place, by rolling back the interventionist measures that caused the present emergency. Government’s proper role is to punish fraud and enforce contracts, not to own and manage the economy. We cannot achieve financial health unless we are willing to free the markets.”

I was against the bail out, so obviously I'm against any policy that mean implementing it in more ways. This mess was caused by the government 'encouraging' banks to give loans to people who didn't qualify for them. Then those people couldn't make their loan payments. Suddenly the notes that the banks sold became devalued, worthless. Businesses built around trading those notes started to collapse. People who invested money in them started to lose it. This threw the economy for a curve ball.

And people started to face losing their homes. Um...when you don't pay for something you's called stealing. Forclosure is the least you should face. Idiot.

The correct action to be taken would have been to let those people lose their homes. The financial institutions then owning them should have sold them, even at a loss, to people who could afford to buy them. That is all.

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