The Bailout

There is a staggering amount of economics that I don't know or understand. This has not stopped our president, the candidates for his job or the bulk of Congress from commenting on the current "financial crisis" so I won't let it stop me either.

Here's what I do know: $700 billion is a lot of money, the government doesn't have that much money and no one is quite sure whether it is enough money or will, in fact, do any good in the long term. The other thing I know: I don't like any of it at all.

The universal cry is that the free market doesn't work. That's odd...it was working until a couple weeks ago. It had worked with only a couple episodes for most of the history of this country. It propelled us to world dominance by the end of the last century. It made more millionaires than any other economy, created the highest gross domestic product, per capita income and overall general wealth of any economy in any country in the history of the world. Yet, it doesn't work. What am I missing?

On the contrary, what doesn't work is getting in the way of the free market punishing people for overextending their credit in the name of greed. What doesn't work is stepping in the way of the free market correcting a long overdue imbalance.

I have a few random thoughts on this whole thing. A Republican, free market loving, administration is essentially nationalizing the financial system. What? To give them credit, the plan they have proposed puts all the power into one man with essentially no legislative oversight or accountability. Meanwhile, the Democrats, always first to point out income and wealth inequality, should be rejoicing over the biggest slap in the face to the wealthy elites that could possibly occur, but instead they are happy to socialize banking to protect the wealthy they so hate. I suppose it's any obvious choice - socialize no matter the consequence because we'll all be better off with the government doing everything for us.

The financial collapse will eventually affect my family, but not that much. The food prices and gas prices have done more significant damage than any unemployment or wage stagnation resulting from corporate America not having easy credit. My family doesn't invest in mortgage equities - we don't even know what mortgage equities are. Also, I didn't buy a house in Southern California when prices were at their highest. You know way? I couldn't afford it. Neither could most everyone else, but that didn't stop them. Lesson learned.

It would seem I don't have sympathy. I don't. I think the market is about risk and those not bright enough to deal in that risk shouldn't. Those that are bright enough, but get blinded by greed and power should pay the price.

It may also seem that I don't fully comprehend the catastrophe inherent in letting the market correct itself. Probably I don't. My instinct tells me that the government bailout only delays the inevitable. Most of this problem derives from the collapse in house values and even though here in Southern California prices have dropped 35% in the last two years that means a median price of $350,000 and guess what, most of the people I know still can't afford that mortgage payment. People were making bundles of money off people that couldn't afford mortgages. Now they are losing it. Good. That's how a free market works. It giveth and it taketh away.

The government should keep my money out of it. I'm making my payments. I was bright enough not to take out a loan I couldn't afford. I've been stingy with my money and judicious in my debt. Now I get to help pay for everyone who wasn't. Government should exist for protecting my rights, not bailing out people who should have known better.