About the bail-outs

Been wanting to write for some time about the bail-outs, and why they're bad and how they may even be retarding the chance for economic recovery. Maybe not, though, because of the nature of the economic collapse.

Anyway, when a company goes out of business, its products usually go off the market for a time -- its branded products, anyway -- and there's a temporary displacement of the employees. Over all, though, when a company goes out of business, it's because it's inefficient, obsolete, badly managed, or something similar. And I find I've got to preface all of this by saying "In a free market economy," because let's face, we don't live in a free market economy, and the economic meltdown is less the fault of the free market than it is of government interference and poltical bullying.

At any rate, when a bad or outdated or inefficient or poorly-run company goes out of business, it's a good thing. The assets it was sitting on are then freed up to go to more useful, better managed, and more efficient companies, or they can even be re-directed to some new area all together.

On the other hand, if you take a crummy company or one that produces buggy whips or something, and prop it up with public funds, all you're doing is 1) throwing money down a hole; 2) keeping the capital and employees from going somewhere else where they would be more productive; 3) blocking growth and innovation in the economy in general. Going out of business is the real world's way of saying: You're only taking up space and wasting resources.

In the 2008 meltdown in particular, I'm not convinced the bail-outs -- as in TARP and Geithner's picking and choosing which financial institutions got to survive -- did much good, though apparently the Comrade among others keeps repeating the mantra, "It could have been worse. It could have been worse." Who really knows? Maybe "It could have been better. It could have been better." I think the very fact that recovery isn't happening is a strong indication that "It could have been better. It could have been better."

The only thing is, the financial collapse didn't happen in a free market. Contrary to the Comrade's peculiar economic ideas, Wall Street is not "unregulated" and it hasn't been "unregulated" for many, many decades. No doubt the stupid diktats from the government about giving mortgages to the unemployed and unemployable went a long way toward destroying the banks and insurance companies, and the other companies and individuals who invest in them. So perhaps we could classify the collapsing companies as being "badly managed" -- by the federal government and the Reserve Bank?

That makes more sense than blaming the collapse on the personal greed of Wall Street traders. I mean, the traders are there to make money. If they make money, their companies make money. If they were getting reckless -- which hasn't been proved to me -- perhaps they were spurred to take more and more risk in hopes of making enough money to compensate for what they were losing on Fannie Mae and Freddie Mac and related. If they hadn't had so many losses in one department, maybe other departments wouldn't have been under so much pressure to perform?

I don't know. I doubt anyone knows what kinds of deals go down between the feds and Wall Street. I'm sure that Wall Street appreciates the support -- with Uncle Sam standing behind them, they can take all kinds of screwy risks. I mean, who cares? If they throw away a billion or so, the government will rush to their rescue.

Which brings us to the worst reason for bail-outs: They tend to support the very worst organizations around. They reward the incompetent bunglers -- and use the profits of the successful to do it.

And that's about it. I've been wanting to write that for some time, but have been distracted by the shenanigans of the politicians.

And I saw where Charlie Sheen was found "drunk and naked" in a hotel room. This is news? And still, he sets himself up as some kind of guru and font of wisdom for how others should behave... and vote? I like Charlie Sheen. He's funny. But he doesn't know jack about politics or economics.

Save the Republic!