Monday, September 8, 2008

Bye Bye Fannie and Freddie, Hello Socialism

I was shocked (in bad way) when I heard the news that the government was going to take over Fannie Mae and Freddie Mac. This is not good. Here's my top ten list as to why this is so:
  1. Have you seen the way that the government runs its own departments such as Department of Homeland Security, the Food and Drug Administration, and Department of Social and Health Services, the TSA? Yikes.
  2. The free market works bet. The market likes to correct itself when it gets way overboard one way or the other. Make stupid loans=get slap in the face correction. With a government takeover, the equilibrium process does not get to right itself.
  3. How is the government going to pay for this mess? My tax dollars and your tax dollars. I would rather have investors lose the money over bad decisions than the tax payers. That's how the market works. It is also how companies learn to run lean and mean--have investors breathing down your neck and you perform better. Have the government throw money at a bad situation as it continues to grow worse and there is not much incentive to improve.
  4. The government ALWAYS adds another dozen layers of bureaucracy to any organization it runs. Yep, we get to pay for these dozen layers of unnecessary jobs.
  5. You will now get to ask the government if you can buy a home. That thought makes my skin crawl.
  6. First socialized home ownership, next socialized medicine, what will the government take over after that? Frightening.
  7. Where does it say in the Constitution that the government is responsible to bail out investment bankers, the housing industry, or any other organization? Someone in the upper echelon of government PLEASE read the Constitution. Where is Ron Paul when you need him??
  8. Bailouts of any kind mean a lesson was not learned. If your child maxes out a dozen credit cards and you feel bad for them suffering the wrath of the credit companies and you pay off their credit cards, what lesson did they learn? That they don't have to fix their own problems, that they aren't responsible for lousy decisions, that someone else will always be there to clean up their own messes. What will they do next since they didn't learn this vital lesson? It is the same for the Fannie/Freddie situation but on a larger scale.
  9. What does this say about companies that were responsible? Companies that did follow protocols, that did only make responsible loans, that took all of the steps necessary to ensure that their company remained solvent. Too bad, so sad? You could have behaved as irresponsibly as all of the rest and enjoyed the fruits of a government bailout? Good grief.
  10. The political motivation in this situation reeks. Hmmm, election coming up in a few months, the Republic party trying to get elected while following the Republican president with the lowest voter approval rating in history, a strong Democratic candidate, and an odd choice for Vice Prez on the Republican side. Gee, no political motivation there. Yeah right.

1 comment:

  1. I totally agree!! This is very bad and there will be more, much more of this in the future.