Opposing the Bailout

 Posted by on 27 September 2008 at 2:00 pm  Activism, Economics, Finance
Sep 272008
 

If you want to let your elected officials know that you oppose the $700 billion Bush Bailout of Wall Street, you can use this website to send them an e-mail.

For example, Rob Abiera has sent the following excellent letter to his elected officials:

Dear *** SENATOR/REPRESENTATIVE XXX ***

I am writing as a constituent to ask you to oppose the Bush Administration’s request for $700 billion to bail out Wall Street. The healthiest thing for our economy would be to allow the market to work and let those firms deal privately with the consequences of their own actions. I don’t believe in accepting responsibility for other people’s actions and I have no desire to see my taxes used to help some Wall Street firms out of a situation which they created, not me. The answer to the current economic situation is not handouts to Wall Street tied to more regulations. The answer is to get the government OUT of the economy.

I’m sure that I disagree with Senator DeMint of South Carolina on other issues, but on this issue I have seen no better statement of the truth about this situation than his recent press release.

In this instance, Senator DeMint speaks for me, as well.

*** YOUR NAME ***
*** YOUR ADDRESS ***

Rob also included the text of Senator DeMint’s Press release.

I liked Rob’s letter a lot, and I’ve already sent similar e-mails to my own Senators and Representative.

BTW, Alex Epstein has a good piece on the bailout on the Fox News website, “The Bailout: Just a $700 Billion Hedge Fund?

Update from Diana:

I send the following letter to my representatives, plus various other politicians and officials:

Dear So-And-So,

I’m writing to tell you that I strongly oppose any bailout of Wall Street.

The current crisis was created by government controls and regulations. The only rational solution is to allow the market to correct itself by allowing full freedom of trade. The ban on shorting financial stocks should be lifted now: the markets cannot function properly without shorting. The government should not bail out any Wall Street firms — nor anyone else. Taxpayers should not be forced to pay for other people’s irresponsibility.

Then, to preserve economic health in the long run, all of the myriad anti-capitalist controls on the markets must be repealed. Fannie Mae and Freddie Mac should be totally privatized. The Community Reinvestment Act must be repealed.

Do not blame the current crisis on the free markets. Such crises are the inevitable product of a dangerous hybrid of capitalist markets and government controls. More government meddling will only exacerbate the problem. The only real solution is to move to a fully free market in which the government upholds and protects the rights to property and contract. Only then will every person be free to act on his own rational judgment in pursuit of his own wealth, security, and happiness. That’s what America should be all about.

I sent that to:

You need not write anything so lengthy and detailed as my letter. Just a single line saying that you oppose the bailout — and that you oppose government controls of the financial markets — would be fantastic.

Who Wants a Bailout?

 Posted by on 24 September 2008 at 12:32 am  Finance, Politics
Sep 242008
 

As you have no doubt heard, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke recently presented a plan to Congress that seeks to buy as much as $700,000,000,000 in “troubled assets” from prominent financial institutions. But why should these firms be the only ones to get massive amounts of milk from the taxpayer teat? I don’t know about you, but I’ve purchased plenty of assets of dubious future value in my day… why shouldn’t the government help me out too?! If you’re like me, I’m sure you’re wondering why the government isn’t doing more to help alienate you from the negative consequences of your poor decisions. After all, isn’t that what the government’s there for? Granted, they do a lot for us in that regard… but if they’re bailing out Wall Street, why not bail out Main Street — or MY Street?

I recently ran across a website (hat tip to BoingBoing) asking just this question: BuyMyShitPile.com. From their site’s description:

With our economy in crisis, the US Government is scrambling to rescue our banks by purchasing their “distressed assets”, i.e., assets that no one else wants to buy from them. We figured that instead of protesting this plan, we’d give regular Americans the same opportunity to sell their bad assets to the government. We need your help and you need the Government’s help! Use the form below to submit bad assets you’d like the government to take off your hands. And remember, when estimating the value of your 1997 limited edition Hanson single CD “MMMbop”, it’s not what you can sell these items for that matters, it’s what you think they are worth. The fact that you think they are worth more than anyone will buy them for is what makes them bad assets.

So head on over and list whatever crap you’d like for whatever amount you think it’s worth. If enough of us band together, maybe we can reap the rewards of the welfare state too!

Jim DeMint, Man of the Day

 Posted by on 23 September 2008 at 6:36 pm  Finance, Politics
Sep 232008
 

While I’m sure that I’d have some mighty strong disagreements with South Carolina Senator Jim DeMint, he seems to be the only politician talking sense about the current financial crisis. Here’s his press release:

DeMint Opposes Wall Street Bailout: Plan does not solve the problems that caused the current credit crunch, and could make them much worse

September 22, 2008 – Washington D.C. – Today, U.S. Senator Jim DeMint (R-South Carolina) announced his opposition to the $700 billion plan proposed by the Bush Administration to bailout Wall Street.

“After reviewing the Administration’s proposed bailout plan, I believe it is completely unacceptable. This plan does nothing to address the misguided government policies that created this mess and it could make matters much worse by socializing an entire sector of the U.S. economy. This plan fails to oversee or regulate the government failures that led to this crisis. Instead it greatly increases the role for Secretary Paulson whose market predictions have been consistently wrong in the last year, and provides corporate welfare for investment firms on Wall Street that don’t want to disclose their assets and sell them to private investors for market rates. Most Americans are paying their bills on time and investing responsibly and should not be forced to pay for the reckless actions of some on Wall Street, especially when no one can guarantee this will solve our current problems.”

“This plan will not only cause our nation to fall off the debt cliff, it could send the value of the dollar into a free-fall as investors around the world question our ability to repay our debts. It’s also very likely that this plan will extend the cycle of bailouts, encouraging other companies to behave in reckless ways that create the need for even more bailouts, triggering an endless run on our treasury. This plan may make things look better for Wall Street in the next couple months, but the long-term consequences to our economy could be disastrous.

“There are much better ways of dealing with this problem than forcing American taxpayers to pay for every asset some investor doesn’t want anymore. We should start by reforming government policies and programs that created this mess, including the Federal Reserve’s easy money policy, the congressional charters of Fannie Mae and Freddie Mac, and the Community Reinvestment Act. Then Congress should pass a number of permanent and proven pro-growth reforms to encourage capital formation and boost asset values. We need to make permanent reductions in the corporate tax and the capital gains tax rates. We have the second highest corporate tax rate in the world, which encourages companies to take jobs and investment overseas.”

“It’s a sad fact, but Americans can no longer trust the economic information they are getting from this Administration. The Administration said the bailout of Bear Stearns would stop the bleeding and solve the problem, but they were wrong. They said $150 billion in new government spending using rebate checks would solve the problem, but they were wrong again. They said new authority to bailout Fannie Mae and Freddie Mac would solve the problem without being used, but they were wrong again. Now they want us to trust them to spend nearly a trillion dollars on more government bailouts. It’s completely irresponsible and I cannot support it.”

In response, a friend of mine who works in the financial markets said:

He puts the blame squarely where it belongs — on govt policies. The programs he wants “reformed” are some of the real baddies — (they should be abolished rather than reformed). He calls for tax cuts which is fine of course, but that needs to be paired with calls for spending cuts. Otherwise we will aggravate the inflation problem that he rightly points out will result from Pauslon’s plan.

Most impressive was the absence of blaming things on 1) the use of leverage 2) bad decisions by private entities, 3) lack of regulation over the private sector 4) greedy fat cats on Wall street 5) speculators and short-sellers.

Indeed.

Yaron Brook on the Economic Crisis

 Posted by on 22 September 2008 at 12:08 am  ARI, Economics, Finance
Sep 222008
 

The September 19, 2008 issue of Time magazine recently quoted Yaron Brook, executive director of the Ayn Rand Institute, in its recent article on the economic crisis:

What Would Ayn Rand Have Done?

…But as the largest bailout in government history unfolded in almost dizzying waves over recent days, a very different view prevailed at the Ayn Rand Center for Individual Rights, an outpost of free-market, anti-government thinking located just a few blocks from the newly aggressive and highly interventionist Department of Treasury in downtown Washington.

“It’s a complete disaster,” said Yaron Brook, the executive director of the center. “Its a form of national socialism of the financial markets…This is socialism 101.”

…Brook doesn’t blame speculators, traders or financiers for the market’s near-collapse, but instead blames government for having overregulated the markets in the first place. The business leaders bailed out by government this week “are victims,” he said, “and the government set it up.” Washington underreacted to previous crisis, let Fannie Mae and Freddie Mac spin wildly out of control as quasigovernment agencies while taxpayers piled up unsecured debt in their names. The crisis, he added, was “really fed throughout by government policies.”

He also notes that the current Republican administration is doing more harm in intervening in the marketplace than a Democratic administration likely could have.

Too Big to Bail

 Posted by on 23 April 2008 at 6:19 am  Business, Finance, Politics
Apr 232008
 

I really enjoyed Alex Epstein’s “video op-ed” explaining “how the government’s ‘too big to bail’ policy encouraged financial institutions to make billions of dollars in bad subprime investments.”

The text version of the op-ed is available on the Ayn Rand Institute web site, but it’s just soooo much better to hear Mr. Epstein speak that fabulous line about “government bailout crack”!

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