Tuesday, September 23, 2008
I can't claim to understand much about the whole bailout hullabaloo, but I certainly possess some imprecisely aimed anger toward some mysterious shadowy villain (all I know is that he is a banker by day, insurance broker in the afternoon, and congressman in the dead of night).
We regular, old, Americans are just left rubbernecking at all the chaos to patch the cracking beam that apparently suspends our entire earth, and runs only from Wall Street to the Beltway.
While this bailout may at least mean that my patients and I will be less likely to experience the nuisances of a newly-impossible-to-implement national health care plan (unless congress gets a bit of Havana fever, figuring "we've gone this far already..."), I have a feeling that this bailout business is bad for our country overall.
Yes, my knowledge of economics is rudimentary, but it's also my future three-thousand-something-plus dollars that will be used for those Damn Yankees' latest shenanigans, so I insist that even the ignorant be entitled to ask questions:
If fresh capital is necessary to resuscitate and revitalize these companies, why can't we provide be loans, which must be paid back, once the companies get back on their feet? If these businesses are so valuable, why isn't anybody, anybody (China? Bueller?) else willing to buy them, except for our government? If the companies are worthwhile enough to be "saved," why aren't they worthwhile enough to be bought? Surely someone poking around the coal mine has noticed these elusive diamonds in the rough? I've always assumed that if no one wants to buy something, that means that the something isn't actually worth anything.
Many Americans once thought they had some assets/pensions/employment in these companies, and will surely be very, very devastated to find out that, subjective Bayesians be damned, seven years of plenty doesn't imply seven more. Many might end up losing a lot of money. I say, fine, let's bail some of these people out. What I don't understand is, if the government must redistribute income, why not just:
1) Put the $100 billion on layaway,
2) Figure out who ends up the poorest after this big melt-down, and
3) then hand out the cash?
4) Re-assess the situation and see if more is needed.
Why spend the money now, before we've even identified who needs it most? Last I checked, the heads of companies didn't apply for jobs at any welfare agency, so we shouldn't give the money to them to dole out. Why not knock on the doors of the Food Stamp Program and Department of Labor, hand them a few billions, along with the memo, "Expect busy day tomorrow." We'd still be helping the potential victims of the predicted meltdown, just distributing the money to those who need it, when they need it.
While most people recognize that sending good money after bad doesn't actually help "save" anything, some are conjuring up psychological explanations about why we must bailout these companies. They talk about an capital freeze that will stem from lack of "confidence" or "faith" in the market. I tend to believe businesses are generally judged based on their monetary value, rather than psychological or religious value. But in case I'm wrong, why don't we hire Dr. Phil and the Pope to ease our troubles, rather than Henry Paulson? We are constantly being told that this bailout must happen quickly, lest our country be destroyed, and all the skeptics be turned into pillars of salt. At least Pope Benedict can then intercede on all our behalves.