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This is not a compete surprise, but when I saw the news that the government is going to bailout Fannie Mae and Freddie Mac I was disappointed at that one more proof that we don’t really live in a free market. I might not be so disappointed if our government leaders were to approach this as a way to ease the economy back (since it’s going backwards anyway) rather than fooling themselves (and many citizens) into thinking that somehow this takeover bailout could move the economy forwards.
Somewhere along the line every person in this country needs to accept the first rule of economics 101: the economy will contract sometimes – plan for it, prepare for it, and accept the truth when it happens. Only by accepting that truth will we have any hope of not making things worse by shutting our eyes and avoiding reality.
5 replies on “Oh Goody – More Debt”
Careful, David. You’re showing your heartless libertarian side again – nevermind that I agree with you and think the banks and GSEs should be left to succeed or fail on their own.
I think people forget that you can love someone (or a group of someones) and still allow them to fail.
The thing that really frustrates me is that our continued interference gives people a false sense of security (“Nothing really bad can happen, the government will always step in.”) as we begin to imagine that there is always some magic solution without adverse side effects.
This goes to show that Republicans (at least as far as the Bush administration goes) have become supporters of big government. Nationalizing mortgage lending is not something that would fall within the realm of Reagan-style conservatism.
I wonder if there is a way that we could remind them that we don’t need more proof about where they stand on the appropriate size of government. 🙁
In the UK are massive lender called Northern Rock went under and our Government had to do the same thing – throw tax payers money at the problem. I think the financial institutions that caused much of the mess should pay and profits and dividends should cease until their debts are re-paid. I also do get your point about the cyclical patterns of economic growth – and you’re right – you can’t avoid them, you can just try and make the bumps a little smoother by having a good suspension on your vehicle and bracing yourself when the bump arrives.