Correct me if I have this wrong: If a company, especially a multi-billion dollar financial institution, is experiencing success, then the company's executives, its employees, and its stockholders get to share in that success. Now, if the company is performing badly, then you would expect that these same executives, employees, and stockholders must also share in the misery... right?
That brings us to the events of the last few weeks in which our federal government, with our hard-earned tax dollars, has spent billions of dollars bailing out Bear Stearns, Freddie Mac, Fannie Mae, and now American International Group (AIG). This is a huge deal, folks.
A couple things bother me about all this, not the least of which is inflation. I'm no financial expert, but from what I gather, the Federal Reserve simply printed/created the $85 billion that they used to bail out AIG. That's 85 billion more dollars that have flooded our money system but are, of course, not backed by anything of value, meaning the value of the dollar just went down by an equivalent amount to what was just flooded into the economy. Fannie and Freddie on the other hand were simply handed money that was taken out of my monthly check, so that was just a straight up transfer of wealth. How quaint.
What also bothers me is of course what I alluded to earlier, and that is the fact that I don't see any of the wealth created by these companies when they are experiencing good times, but they certainly see my wealth when they fall on hard times. And how exactly does the government pick and choose who gets bailed out and who doesn't? When does it stop?
If you read the Constitution, you will see that these bailouts never should have started in the first place. I just checked Article I Section 8 (powers of Congress), and I didn't see anything in there about handing over the tax money of American citizens to some business that has fallen on hard times, or even worse, has fallen on hard times due to gross mismanagement or corruption... I'm talking to you Fannie and Freddie!
The beauty of our country's free-market economic system (as it should operate) is that we all have the power to succeed. But the system only works properly if we also have the power to fail. Once government takes the "fail" part out of the equation, then we no longer have a free-market system; instead we have socialism. Under socialism, we lose the power to succeed, and misery is shared by everyone.
Good Day to You, Sir
"If a nation expects to be ignorant and free... it expects what never was, and never will be." --Thomas Jefferson
3 comments:
Chanman, it's American International Group not American Insurance Group. Obama made the same mistake.
Other than that I totally agree with your post. It sickens me that personal responsibility is a thing of the past.
Ack! I knew it was "International" and I wrote "Insurance" anyway.
Thanks for the correction and the comments.
There you go reading the Constitution and thinking that the politicians actually would honor it. Power is more important than something as arcane as the Constitution.
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