Flyover Country

From our friends at Breitbart.com via the AP:

In a sobering appraisal of the nation’s banking system, President Barack Obama signaled Monday that he will need more money to bail out the battered financial industry. Even so, he said, “some banks won’t make it.”Neither Obama nor other administration officials said how much a renewed rescue plan might cost. It is possible that additional help could come from the Federal Reserve, not from Congress.

Still, Obama’s acknowledgment reinforced what many economists and bank industry officials have speculated for weeks.

“We can expect that we’re going to have to do more to shore up the financial system,” Obama said.

Treasury Secretary Timothy Geithner plans to announce a new framework for rescuing the financial sector in a speech next week. The plans will focus on how to use the remaining $350 billion in a $700 billion Troubled Asset Relief program that Congress approved in the fall. It will include new programs aimed at helping homeowners stave off foreclosure, and efforts to stabilize the banking sector.

We can’t keep doing this.  This is just insane.

Sometimes businesses, including banks, have to fail.  It’s how the market weeds out those who aren’t doing things properly.  If the government bails everyone out there’s no incentive to fix what’s broken.

Why can’t more people see this?

Also, as I’ve said before

If you aren’t free to fail, then you aren’t free to succeed!

From breitbart.com:

WASHINGTON (AP) – With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to President Bush for his certain signature.The final vote, 263-171 in the House, a comfortable margin that was 58 more votes than it garnered on Monday. The vote capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act.

This is awful, a sad day for the United States.  We have effectively completely nationalized an entire industry.

Now that the bail out has failed, what now?

Well, there’s a simple rule that works every time it is tried when the government gets involved in anything.  First, if you want less of something, tax it.  If you want more of something, reduce taxes or subsidize it.  So, if we want more investment instead of people pulling out of the market, why not cut capital gains taxes?

Here’s another idea:  Why not suspend mark to market?  If you are not familiar with this, check out this article at Wikipedia.  To put it very simply, these rules value assets in a company at current market value, usually a low, conservative estimation of market value.  This effects the value of a company’s assets and can cause capital shortages.  Suspending these rules would help ease some of the pressure on these companies.

Here’s a better idea:  GOVERNMENT LEAVE THE FREE MARKET ALONE!!

If we are not free to fail, we are not free to succeed.  I’m a small business owner.  The desire to succeed is a huge motivator.  If I had a “safety net” under me and it didn’t matter if I worked hard today or not, I may not have as much of a desire to work hard and earn my living.  By working hard I’m producing goods and services that increase the country’s GDP (although by a small amount but if you add up all the small businesses in the country, it’s a good portion of our country’s economy).

From the “Wow We Do Have Leaders In Congress” department:

Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.

The House on Monday defeated a $700 billion emergency rescue for the nation’s financial system, ignoring urgent warnings from President Bush and congressional leaders of both parties that the economy could nosedive into recession without it.

Bush and a host of leading congressional figures had implored the lawmakers to pass the legislation despite howls of protest from their constituents back home. Despite pressure from supporters, not enough members were willing to take the political risk just five weeks before an election.

We the people made this happen, and we should pat ourselves on the back!  This actually gives me hope that socialism can still be rejected in today’s America.

It almost brings a tear to my eye..