By Mark Drolette
I’m afraid I just don’t get this “free market” stuff. Recent government bailouts of private companies look to me like anything but adherence to free market principles, but then, what do I know? I’m just an average American, not someone economically savvy like George W. Bush who -- well, I’m not economically savvy.
So far be it from me, at a time like this, to ignorantly chime in with unhelpful negativity about the $700 billion plan by Secretary of the Treasury Henry Paulsen to fund the government purchase of oodles of “toxic debt” from companies that shoulda known better, even if its cost, when added to previous bailouts of $29 billion (Bear Stearns), $200 billion (Freddie Mac and Fannie Mae) and $85 billion (AIG), shoves the total tab for the American taxpayer past a trillion dollars for 2008 alone. (The silver lining: there are only three months left!)
I take solace in knowing it’s for the good of the country, and am comforted by Bush’s assurance that our government is “responding with unprecedented measures,” although my more pessimistic friends (like, I think, all of them) say that’s exactly what worries them.
I’m also encouraged by the honesty Paulsen displayed when he told the Senate Banking Committee: “When you ask about taxpayers being on the hook: Guess what, they’re already on the hook. They got put on the hook by the system we have…”
Well, even I know we’re on the hook. We’ve always been on the hook.
The “system” to which Paulsen refers is the Federal Reserve System, birthed in 1913 by the Federal Reserve Act, legislation driven by a few fabulously wealthy banking families/interests seeking to monopolize riches and power (who can blame them, really?) but not enamored with the yucky mess that sometimes occurs with good bets gone bad. (Personally, I’m enamored with “Good Girls Gone Wild,” but I regress, whenever possible.) Thus, the act’s backers made sure the American taxpayer was designated as what is known as the “lender of last resort,” which is financial-speak for “hook-ee,” which I suppose, then, would make those responsible for our current mess “hookers.” (Which sounds about right, if you know what I mean.)
In other words, for 95 years now, all taxpayer fleecings, I’m sorry, government bailouts, have been legal.
I know that makes me feel better.
Now, another concern I’ve heard voiced, in addition to the familiar ones about saving the private sector’s bacon at public expense, is that loading the economy with a trillion-plus bucks made from thin air (a really neat Fed trick) will help goose inflation and push the dollar lower n’ the IQ of Bush/John McCain/Sarah Palin. (Pick one, or even all three; it won’t affect the cumulative much.) But, really, who cares? If that dough comes a cropper, the Fed can always print more!
Because, here’s the deal: Our country is in deep trouble and we must act now; we can’t afford to waste time on silly things like discussing facts. (Or on establishing oversight either, as Paulsen demands his proposed bailout be free of review “by any court of law or any administrative agency.”)
Again, I don’t understand how any of the above squares with the long-avowed GOP belief in free market principles, nor do I purport to comprehend the benefits that such massive bailouts will provide all, er, some, uh, a handful of Americans. I only know that people like Paulsen and the rest of the folks privy to how our economy truly works are doing all they can to make sure tons of our money ends up right where they want it to.
Hmm. So maybe I really do get it in the end.
As do we all.
Copyright © 2008 Mark Drolette. All rights reserved.