Fear and Panic Inappropriate Tactics for Government
September 25, 2008
With the presidentís dire forecast for the economic outlook of the nation during his prime time speech to the endless panic emanating from the Federal Reserve, one might think that the sky were falling and that the end of our way of life is at hand.
The continued false sense of urgency surrounding the Wall Street bailout has escalated almost into a contest to see which official can provide the most ominous sound byte describing how our nation is on the verge of collapse due to a handful of companies that have been mismanaged and find themselves teetering towards bankruptcy.
Companies, large and small, have and will continue to go out of business and while the effects of these failing can be devastating at the time (think Enron), the failures are absorbed into the markets and new companies rise up to take their place. It is the very nature of a free market.
While it is unusual to have such a wide spread collapse among so many companies in one industry, these too, will be absorbed and the world will continue to spin and the sun will still come up. By rushing through a poorly thought out, panic-ridden bill that blindly throws taxpayer money into the arms of Wall Street, we risk becoming a perverse welfare state where the poor are robbed to pay for the rich.
In addition, many of those responsible for the financial disaster on Wall Street may be hired by the government to oversee any sale or distribution of assets that are bought with the taxpayer money, essentially providing failed executives with an opportunity to make more money off of their ineptitude but under the guise of government work.
It has been a week since this issue broke, and despite the threat of disaster without swift passage of legislation, we are all still here and the economy is still standing. In the meantime, our elected officials have had the opportunity to discuss the ramifications of such a plan, and as the immediate panic set upon us by Mr. Paulson and Mr. Bernanke, the director of the Federal Reserve and Fed Chairman, respectively, has subsided, deeper investigation into the entirety of this fiasco has led many to believe that the problem will not be solved by throwing money at it, and that this plan in of itself may not even work as advertised regardless of the best intentions.
In an election year few want to be blamed for the failure of the economy. However, fewer yet want to be blamed for wasting $700 billion only to realize later the problem was much more substantial than they ever suspected.
As a matter of reference, for $150 billion, less than 1/3 of the total being considered for funding a Wall Street bailout, every American could be provided with health insurance.
While the bailout legislation is making its way through both chambers of Congress, there are substantial numbers who rightfully oppose its passage. We encourage all of our members and readers to support these leaders and reach out to those who may not understand the disastrous consequences of the bailout approach.