The Government & The Economy
If you haven't seen the previous blog on the subject, see:
http://pontificating-randy.blogspot.com/2008/08/government-intervention-in-free-market.html
This is sort of a "Part Two" to the above. Now, having given the Bush Administration and the Federal Reserve a pat on the back, I now must give a more scathing view of their action, or inaction, but first, a short preface.
Many people are skeptical of politicians, and with good reason. There's nothing wrong with some healthy skepticism about anything in and around our lives. The problem for us becomes when politicians switch positions on a given issue, or at least seem to do so. Did they change to get votes, or did they really change out of conviction? We're often not sure, but just as often, our answer to that question probably mirrors our political views. If a politician swears by chocolate ice cream, but then changes to vanilla ice cream, if you like chocolate, you may well feel that this politician is pandering to the vanilla vote. If you like chocolate, you welcome a new convert. There isn't a really good answer to the question, but hopefully we try to decide these things on an individual basis, and get some info on the particular subject and the politician involved. We're in an election year, when all such things are intensified, but I hate to think that a politician of either party must always hold to some idea and never change or modify their position without being called a "flip-flopper." On the other hand, there are some blatant changes that go on which only concern politics, but we always have to keep in mind that this is part of the "genius" of our system. Politicians tend to want to get on the side of the bulk of the electorate, and that makes our system go.
Now, having muddied the waters... I mean having gotten that out of the way, there are certainly some valid criticisms of the recent government involvement in the economy. The administration did little to help anyone early on in the current crisis. Their "free market" mantra led them to utter statements about how if you buy a home and can't pay, tough sh... ah, luck. Then the chickens came home to roost, as the banks and mortgage companies began to reap what they had sown, and losses on their balance sheets mounted. Now, this was something the Bush Administration could understand, the plight of millionaires. When banks were threatened with insolvency, the administration quickly got off of their butts and just as quickly forgot about their own "free market" crap.. I mean positions. The pro-business, free market mantra is, "If you take whatever action, then you have to bear the consequences or the benefits." So, if banker XYZ lends Joe Shmo 200 grand to buy a house, and old Joe makes $8.50 an hour and he can't pay the mortgage, banker XYZ takes a hit. With this administration, when Joe Shmo couldn't pay, they didn't give a damn, but as soon as Joe's loss hurt banker XYZ, they sprang into action.
Now, I'm not ideological on this, as I think, as distasteful as it is, banker XYZ had to be helped, for fear that the whole system could come tumbling down. Don't forget, it really isn't just banker XYZ, but many, many bankers in trouble, and this crisis doesn't appear to be over yet, but as the article (with link in part one) notes, the administration favored helping bankers, but when Congress added help for homeowners, they balked, until political reality set in, and they went along, although reluctantly. So what does this mean? To the Bush Administration, if you're a banker and you gave that loan to Joe Shmo (even if you knew, or should have known that Joe couldn't afford it), you should be protected against Joe's default on the loan. If you're Joe Shmo, "The hell with you!"
As the crisis deepened and the government took stronger actions, thus increasing government power, the administration spokespeople kept spouting the free market nonsense, and acting as if they really believed in it, in spite of the actions they were taking. It has been much the same with oil/gasoline prices. When the cry went out to curtail speculators in the oil and gasoline markets, the administration spokespeople, led by Treasury Secretary Paulson, said that there really wasn't much speculation causing prices to soar, it was just the free market setting the price, which was another flight from reality by this bunch. Now, in the last couple of weeks, as oil and gas prices have plummeted, it has been noted that speculators have been fleeing the oil markets. I thought speculators weren't the problem? You can't have it both ways!!! (Note that just because oil has fallen in price, don't get too gleeful as yet, as we will have to see what happens in the longer term.)
http://pontificating-randy.blogspot.com/2008/08/government-intervention-in-free-market.html
This is sort of a "Part Two" to the above. Now, having given the Bush Administration and the Federal Reserve a pat on the back, I now must give a more scathing view of their action, or inaction, but first, a short preface.
Many people are skeptical of politicians, and with good reason. There's nothing wrong with some healthy skepticism about anything in and around our lives. The problem for us becomes when politicians switch positions on a given issue, or at least seem to do so. Did they change to get votes, or did they really change out of conviction? We're often not sure, but just as often, our answer to that question probably mirrors our political views. If a politician swears by chocolate ice cream, but then changes to vanilla ice cream, if you like chocolate, you may well feel that this politician is pandering to the vanilla vote. If you like chocolate, you welcome a new convert. There isn't a really good answer to the question, but hopefully we try to decide these things on an individual basis, and get some info on the particular subject and the politician involved. We're in an election year, when all such things are intensified, but I hate to think that a politician of either party must always hold to some idea and never change or modify their position without being called a "flip-flopper." On the other hand, there are some blatant changes that go on which only concern politics, but we always have to keep in mind that this is part of the "genius" of our system. Politicians tend to want to get on the side of the bulk of the electorate, and that makes our system go.
Now, having muddied the waters... I mean having gotten that out of the way, there are certainly some valid criticisms of the recent government involvement in the economy. The administration did little to help anyone early on in the current crisis. Their "free market" mantra led them to utter statements about how if you buy a home and can't pay, tough sh... ah, luck. Then the chickens came home to roost, as the banks and mortgage companies began to reap what they had sown, and losses on their balance sheets mounted. Now, this was something the Bush Administration could understand, the plight of millionaires. When banks were threatened with insolvency, the administration quickly got off of their butts and just as quickly forgot about their own "free market" crap.. I mean positions. The pro-business, free market mantra is, "If you take whatever action, then you have to bear the consequences or the benefits." So, if banker XYZ lends Joe Shmo 200 grand to buy a house, and old Joe makes $8.50 an hour and he can't pay the mortgage, banker XYZ takes a hit. With this administration, when Joe Shmo couldn't pay, they didn't give a damn, but as soon as Joe's loss hurt banker XYZ, they sprang into action.
Now, I'm not ideological on this, as I think, as distasteful as it is, banker XYZ had to be helped, for fear that the whole system could come tumbling down. Don't forget, it really isn't just banker XYZ, but many, many bankers in trouble, and this crisis doesn't appear to be over yet, but as the article (with link in part one) notes, the administration favored helping bankers, but when Congress added help for homeowners, they balked, until political reality set in, and they went along, although reluctantly. So what does this mean? To the Bush Administration, if you're a banker and you gave that loan to Joe Shmo (even if you knew, or should have known that Joe couldn't afford it), you should be protected against Joe's default on the loan. If you're Joe Shmo, "The hell with you!"
As the crisis deepened and the government took stronger actions, thus increasing government power, the administration spokespeople kept spouting the free market nonsense, and acting as if they really believed in it, in spite of the actions they were taking. It has been much the same with oil/gasoline prices. When the cry went out to curtail speculators in the oil and gasoline markets, the administration spokespeople, led by Treasury Secretary Paulson, said that there really wasn't much speculation causing prices to soar, it was just the free market setting the price, which was another flight from reality by this bunch. Now, in the last couple of weeks, as oil and gas prices have plummeted, it has been noted that speculators have been fleeing the oil markets. I thought speculators weren't the problem? You can't have it both ways!!! (Note that just because oil has fallen in price, don't get too gleeful as yet, as we will have to see what happens in the longer term.)
Labels: Bush Administration, economy, Federal Reserve, free markets, oil prices, Treasury Secretary Paulson
posted by Randy at 11:30 PM
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