This will probably be my last post on TARP and the various bailouts. To me, this is a personal issue. I figured I should take a few minutes to explain why.
I have been a capitalist for as far back as I can remember. Where some people study and practice music, and are therefore musicians, I am a businessperson.
My two degrees are in business. I served my 13 years in Fortune 500 companies. I even took my life savings and hung out my shingle and now am one of the fortunate individuals who actually owns a profitable business.
As most folks who know me can attest, my belief in capitalism borders on the religious. I'm not the only one. For as far back as I can remember, others have espoused that the pain and excesses of capitalism, though distasteful, sometimes heart-breaking, and occassionally cruel, in the end resulted in a better world for everyone.
During the cold war, next to human rights, this belief in capitalism, more than our military differences, defined us as different from the Soviets. The Soviets had an economy that was run by a few talented minds. We had an economy that was run by millions and millions of minds.
In the end, it wasn't a contest. Our economy grew and prospered. Theirs died. It wasn't tanks in Europe that won the war. It was businesspeople like me.
TARP? It is rumored that one nameless congresswoman, on the day TARP passed, said, "I don't think it is too much of a stretch to say this may be the day America died."
I agree. The day TARP passed, it became clear that we were not a free-market society, run by millions of businesspeople. Instead, we are a command economy, like the Soviets, where regardless of merit, politically connected people prosper and the rest of the country suffers.
Those who think TARP was a good thing are basically in agreement with Tim Geithner when he says it was "deeply unfair", but that it was absolutely necessary.
To this, I have so many thoughts, but the main one is this: to embrace this school of thought, you have to believe in the following:
1. That the end justifies the means.
2. That the rights of people are not as important as the goals of the state.
3. That some companies which are big, well-connected and chock full of cash, should not have to bear the consequences of their actions.
Number 1 and 2 are straight out of my 8th grade civics book on the differences between us and the communists during the cold war. The biggest difference between us and them was supposed to be that we had rules. We followed them. Everybody had to follow them.
Even the rich and powerful had to follow them.
In communist countries? Individuals were inconsequential and only the state mattered. And that meant that the state could do anything it wanted, at any time, if it felt it would advance its goals.
That TARP was morally wrong is not even debatable. Even its most ardent supporters tip their hat to this fact, though they prefer to use terms like "unfair". However, the basic premise of unfairness is that it is wrong.
There isn't a person in America who defends TARP on moral grounds.
Problem #1: TARP was morally wrong.
So, the supporters of TARP then go on to say it was necessary. They said that without it, unemployment would rise over 8% and bank lending would stop. They turned out to be totally wrong on both those counts.
We passed TARP, unemployment shot up to 10% and businesses have a harder time than ever getting loans. In addition, it was supposed to stop mortgage foreclosures and it has been an outright failure at doing that.
The end result is that TARP saved the bankers and nobody else.
Would things have been worse without TARP? I'm not sure they would. How can I make such an extreme statement? Let me ask you this: Lehman brothers failed. Would things be better today if they were still around? of course not. In an economy this size, Lehman's collapse basically didn't matter in the long-term.
It caused a short-term shock, but frankly, it SHOULD have caused a short-term shock. It should have caused the kind of reaction that caused Wall Street banks to agree to reasonable regulation and change their irresponsible ways.
So, would ALL Wall Street banks have failed? No. Most of them weren't in that much danger. When TARP money was distributed, they literally gathered the CEOs of the largest banks in a room at the White House and told them they had to take the money.
What about the guys who didn't want or need the money? They were forced to take it so as not to stigmatize those who DID want and need the money.
A few more would have failed, but the majority of them were accessing other sources of capital to get them over a short-term hump. (See Warren Buffet and Bear Sterns for an example.) The strong would have survived. The weak would have failed. You know: capitalism.
The reality is that TARP was relatively small in impact relative to other actions by the government to prop up the banks, many of which are happening still, today.
So, the argument that it was necessary? I'd say SOMETHING was necessary, but TARP wasn't.
It asked for no sacrifices on the part of banks. It imposed no new regulations or safeguards (and only the true kool-aid drinkers are dense enough to think that Obama's Wall Street reform bill was written by anybody other than Wall Street). It was, frankly, a rushed piece of legislation that didn't accomplish its stated goals, but simply gave cheap cash to a few banks, many of which didn't want or need the cash.
This is like saying that a kid has fallen off their bike. They need some neosporin and a bandage. So, instead, they get skin grafts and 5 months in the ICU and the doctor harvests their kidney to pay the medical bills. Did something need to be done? Yes. Did what was done "work"... yes, in a manner of speaking. But was it the right thing to do?
Just like TARP, a well-intentioned, morally evil solution that solves the immediate problem is not the right thing to do. Not just from a moral standpoint, but from a practical standpoint as well.
Point #2: TARP was so badly executed and the desired results could have been obtained far better by many, many other solutions, that to say it was "necessary" is giving too much credit to a very, very bad solution.
Lastly, now the TARPoids are trying to say that TARP won't end up costing us anything in the long run. From a pure dollars and cents standpoint, that is probably true. Part of this is that the public's outrage over TARP was so obvious that they only spent half the money. They didn't dare spend the other half. As Bankers cashed their gozillion dollar bonuses, the voters became furious and everybody associated with TARP started to try and distance themselves from the outrageous behavior of the folks on Wall Street.
If left to their own devices, they'd have spent the other half. Democracy worked. They didn't spend the money.
So, did it cost us? You can say "no" only if you believe that there's no problem with a society where hard-working people are thrown out on the street while the millionaires and billionaires who caused the problem continue to rake in millions and billions.
So, to bring it back full-circle, from a social justice standpoint, TARP was a complete betrayal of America. It truly was the day America died.
It cost us. It cost us dearly. It laid naked the fact that the government exists only for the benefit of bankers and other politically connected types. It made all too obvious the fact that the government won't help an individual citizen, because an individual's rights simply don't matter in America. Only money matters, and only if the money can be counted in the hundreds of millions or preferrably billions.
I will vote out anybody who voted for TARP. I hope everybody else does the same.
Showing posts with label bank bailouts. Show all posts
Showing posts with label bank bailouts. Show all posts
Monday, October 4, 2010
Tuesday, December 8, 2009
In Defense of George W. Bush
This isn't going to be MUCH of a defense of George W. Bush. He has the distinction of being the only Republican candidate for president I ever voted against. I think he was a man of limited ability, with few discernable accomplishments in life that weren't related to being politically and economically connected.
He campaigned dirty... I know this because John McCain's illegitimate black baby told me so. He had no qualms about besmirching the military service of a decorated war hero, like John Kerry, while soft-pedalling his own lack of service in combat.
He was fiscally liberal and socially conservative, whereas I'm fiscally conservative and socially liberal. He was, basically, everything I didn't want in a politician.
Those are his faults, which have been pounded on again and again by the press. However, he wasn't without some redeeming qualities, and in contrast to the Obama administration, those qualities stand out more starkly.
First, he took his job and took responsibility for it. The statistics show that 9/11 wasn't actually much of an economic calamity. In fact, it was just the low point of the internet bubble implosion. Bill Clinton had the advantage of having the bubble of his presidency implode just a few months after he got out of office. I don't remember the Bush administration, once, blaming the difficulties they faced on the previous administration.
The Obama Administration? A year later is still blaming the Bush Administration. If you're not man enough to take ownership of the job, you don't deserve the job. Bush was man enough. Obama isn't.
Second, he won wars. With the smallest fighting force in generations, Bush deposed a murderous dictator, and changed regime in a country that facilitated the terrorist attacks of 9/11. When the Democrats screamed that the surge wouldn't work, Bush plowed ahead, anyway, and brought Iraq under control. When Bush left office, Iraq and Afghanistan were both under control, only waiting for an end-game that would tie up the loose ends.
Obama has actually managed to put the victory in Afghanistan in peril. That was the war Obama thought was a JUSTIFIED war! Imagine if Iraq hadn't been brought so soundly under control.
There is nothing more disheartening to a combat troop than to be half a world away, with your life in peril, while those at home do all they can to undermine your success. Bush won wars. Obama was handed two theaters of operation that were under control and has lost control of one of them, with little progress in the other.
Third, Bush knew how to run the congress. When Bush wanted something, he put his machine in gear and got it. A completely unfunded Medicare prescription bill? Against almost everything the Republican party stands for? He got it. Any vote related to Afghanistan or Iraq? He got it.
Right now, people are rightly frustrated that the Democrats control both houses of congress and still can't get anything done. The Democrats are basically offerring that yeah, numerically they control both houses, but they can't get the disparate political interests within their party to agree on anything. Bottom line: Democrats can't lead and they can't get things done.
Some older members of the Democrat Party speak wistfully of the time in 1980 when Ronald Reagan came into town and rolled the Democrat congress. Obama is no Reagan. In fact, he's not even George W. Bush. He can't even get his own party in line.
Want further proof that Bush could manage politicians? When the current economic crisis hit, he called McCain and Obama into the Oval Office, briefed them and both of them left, determined to continue Bush's policies in regards to the crisis. Now, I disagree with the handling of the crisis since all we did was mortgage our kids' futures to provide bankers bonuses, but you can't deny: on this issue Bush controlled McCain, and he rolled Obama.
Fourth, Bush was brutalized in the press, but ignored it. He plowed ahead. Never complained, never explained. The Obama administration, despite a completely gaga-infatuated press that loves him dearly, goes beserk any time anybody criticizes anything.
I recently read a very well-informed opinion by an auto industry insider that spelled out how the cash for clunkers program actually cost the taxpayer about $24,000 for every additional new car that got sold.
http://www.edmunds.com/help/about/press/159446/article.html
The Obama administration's response? Attacked the the piece, directly.
http://www.whitehouse.gov/blog/2009/10/29/busy-covering-car-sales-mars-edmundscom-gets-it-wrong-again-cash-clunkers
I was astounded. These guys are so used to the press simply rolling over and giving Obama anything he wants, they lose their minds when actual investigative journalism takes place.
(As a final note on the topic, here is Edmonds rebuttal:
http://features.csmonitor.com/politics/2009/10/31/edmundscom-fires-back-at-white-house-cash-for-clunkers-slam/ )
Maybe not the same as Nixon's "Enemies List", but... well... along the same continuum.
Bush was able to accomplish all he accomplished in spite of an unfriendly press. Obama controls the media and can't tolerate dissention or analysis by the press.
Fifth, Bush had the good sense not to try and inflate his unearned accomplishments. Near as I can figure, his actual accomplishments in life were that his father got him into the Air National Guard and he got his pilot's license. He got legacy admission to Yale. He got into Harvard based on wealth and political connections. He used his family's money to run an unprofitable oil company. He used his family's money to buy the Texas Rangers. He was apparently, a competent governor of the State of Texas.
Of all those opportunities, he got in the door based on family connections and not because of merit. Yet, you never heard him mention anything about any of those things. Really, regardless of how he got those things, they're all pretty impressive. Fighter pilot. Yale / Harvard. Oil man. Baseball team owner. Governor.
Obama? Honestly, the way the guy wears his laurels is bordering on shameless. Bush may have gotten his leg-up in life the old-fashioned way, by buying it, but Obama came up during a time of the most eggregious uses of affirmative action. Obama is a Columbia / Harvard man. However, it's pretty clear that he was nothing but an underachieving pothead at Occidental college before being accepted as a transfer student to Columbia. That's a heck of a leg up in life.
Obama doesn't appear to have ever demonstrated any real professional success, but was given book deals as a law school student and as soon as he was elected to the state legislature, he was on speaking tours all over the country. America needed a poster boy, and Obama was it.
Even when he won the Nobel Peace prize, he and his followers shamelessly acted as though it was somehow based on merit. Months later, when he sent an additional 35,000 combat troops to Afghanistan, the irony escaped them.
Seems to me that both men got a lot of advantages in life that they didn't earn. One was based on wealth and political connection. The other was based on the color of his skin. Thing is, Bush never pretended that he earned the things he's gotten.
Sixth, Bush lowered taxes and that didn't contribute to the deficit. Yes, these insane Bush tax cuts that everybody complains about actualy INCREASED revenues. Throughout the Bush years, tax revenue kept pace with inflation. As a fiscal conservative, that's all I want tax revenues to do. It wasn't the tax cuts that caused the Bush deficits, it was profligate spending.
Obama has finally realized that small business is the key to full employment, yet his stated tax objectives will absolutely brutalize small business owners. You simply can't get people to put 100% of their financial and emotional well-being on the line if the only one who benefits is the government.
Bush understood: the money belongs to us. Obama thinks the money belongs to the government.
So, was Bush perfect? Good lord, no. I don't think he was a great president, or even a good one. However, he was, in many respects, a much, much better president than Obama is turning out to be.
I do feel that Obama is a much more intelligent man, but then, so was Jimmy Carter. I can only hope that Obama gets better as time goes along. So far, though, what I see is almost all the worst aspects of the Bush years. We're still bailing out the rich.
Under Obama we're rewarding the irresponsible at a far greater rate. Sorry, but we all have tight finances and things we want to buy. If you weren't smart enough to read or ask a few questions when you got your mortgage, or you treated your HELOC like a winning lottery ticket, you need to lose your house. The government shouldn't be rewarding your stupidity.
If you ran your car company so badly that you're going out of business, the union's pension and medical funds should be bailing you out, not the taxpayer who doesn't want your cars.
Yeah, this is change we can believe in. We're losing wars, now. Raising taxes. And yet still doing most of the bad stuff we did under Bush... like spending like there's no tomorrow.
There's time. Obama can get better and I think he will. So far, though, he'd have to improve to be as good as the man that many are considering the worst president since the Great Depression.
He campaigned dirty... I know this because John McCain's illegitimate black baby told me so. He had no qualms about besmirching the military service of a decorated war hero, like John Kerry, while soft-pedalling his own lack of service in combat.
He was fiscally liberal and socially conservative, whereas I'm fiscally conservative and socially liberal. He was, basically, everything I didn't want in a politician.
Those are his faults, which have been pounded on again and again by the press. However, he wasn't without some redeeming qualities, and in contrast to the Obama administration, those qualities stand out more starkly.
First, he took his job and took responsibility for it. The statistics show that 9/11 wasn't actually much of an economic calamity. In fact, it was just the low point of the internet bubble implosion. Bill Clinton had the advantage of having the bubble of his presidency implode just a few months after he got out of office. I don't remember the Bush administration, once, blaming the difficulties they faced on the previous administration.
The Obama Administration? A year later is still blaming the Bush Administration. If you're not man enough to take ownership of the job, you don't deserve the job. Bush was man enough. Obama isn't.
Second, he won wars. With the smallest fighting force in generations, Bush deposed a murderous dictator, and changed regime in a country that facilitated the terrorist attacks of 9/11. When the Democrats screamed that the surge wouldn't work, Bush plowed ahead, anyway, and brought Iraq under control. When Bush left office, Iraq and Afghanistan were both under control, only waiting for an end-game that would tie up the loose ends.
Obama has actually managed to put the victory in Afghanistan in peril. That was the war Obama thought was a JUSTIFIED war! Imagine if Iraq hadn't been brought so soundly under control.
There is nothing more disheartening to a combat troop than to be half a world away, with your life in peril, while those at home do all they can to undermine your success. Bush won wars. Obama was handed two theaters of operation that were under control and has lost control of one of them, with little progress in the other.
Third, Bush knew how to run the congress. When Bush wanted something, he put his machine in gear and got it. A completely unfunded Medicare prescription bill? Against almost everything the Republican party stands for? He got it. Any vote related to Afghanistan or Iraq? He got it.
Right now, people are rightly frustrated that the Democrats control both houses of congress and still can't get anything done. The Democrats are basically offerring that yeah, numerically they control both houses, but they can't get the disparate political interests within their party to agree on anything. Bottom line: Democrats can't lead and they can't get things done.
Some older members of the Democrat Party speak wistfully of the time in 1980 when Ronald Reagan came into town and rolled the Democrat congress. Obama is no Reagan. In fact, he's not even George W. Bush. He can't even get his own party in line.
Want further proof that Bush could manage politicians? When the current economic crisis hit, he called McCain and Obama into the Oval Office, briefed them and both of them left, determined to continue Bush's policies in regards to the crisis. Now, I disagree with the handling of the crisis since all we did was mortgage our kids' futures to provide bankers bonuses, but you can't deny: on this issue Bush controlled McCain, and he rolled Obama.
Fourth, Bush was brutalized in the press, but ignored it. He plowed ahead. Never complained, never explained. The Obama administration, despite a completely gaga-infatuated press that loves him dearly, goes beserk any time anybody criticizes anything.
I recently read a very well-informed opinion by an auto industry insider that spelled out how the cash for clunkers program actually cost the taxpayer about $24,000 for every additional new car that got sold.
http://www.edmunds.com/help/about/press/159446/article.html
The Obama administration's response? Attacked the the piece, directly.
http://www.whitehouse.gov/blog/2009/10/29/busy-covering-car-sales-mars-edmundscom-gets-it-wrong-again-cash-clunkers
I was astounded. These guys are so used to the press simply rolling over and giving Obama anything he wants, they lose their minds when actual investigative journalism takes place.
(As a final note on the topic, here is Edmonds rebuttal:
http://features.csmonitor.com/politics/2009/10/31/edmundscom-fires-back-at-white-house-cash-for-clunkers-slam/ )
Maybe not the same as Nixon's "Enemies List", but... well... along the same continuum.
Bush was able to accomplish all he accomplished in spite of an unfriendly press. Obama controls the media and can't tolerate dissention or analysis by the press.
Fifth, Bush had the good sense not to try and inflate his unearned accomplishments. Near as I can figure, his actual accomplishments in life were that his father got him into the Air National Guard and he got his pilot's license. He got legacy admission to Yale. He got into Harvard based on wealth and political connections. He used his family's money to run an unprofitable oil company. He used his family's money to buy the Texas Rangers. He was apparently, a competent governor of the State of Texas.
Of all those opportunities, he got in the door based on family connections and not because of merit. Yet, you never heard him mention anything about any of those things. Really, regardless of how he got those things, they're all pretty impressive. Fighter pilot. Yale / Harvard. Oil man. Baseball team owner. Governor.
Obama? Honestly, the way the guy wears his laurels is bordering on shameless. Bush may have gotten his leg-up in life the old-fashioned way, by buying it, but Obama came up during a time of the most eggregious uses of affirmative action. Obama is a Columbia / Harvard man. However, it's pretty clear that he was nothing but an underachieving pothead at Occidental college before being accepted as a transfer student to Columbia. That's a heck of a leg up in life.
Obama doesn't appear to have ever demonstrated any real professional success, but was given book deals as a law school student and as soon as he was elected to the state legislature, he was on speaking tours all over the country. America needed a poster boy, and Obama was it.
Even when he won the Nobel Peace prize, he and his followers shamelessly acted as though it was somehow based on merit. Months later, when he sent an additional 35,000 combat troops to Afghanistan, the irony escaped them.
Seems to me that both men got a lot of advantages in life that they didn't earn. One was based on wealth and political connection. The other was based on the color of his skin. Thing is, Bush never pretended that he earned the things he's gotten.
Sixth, Bush lowered taxes and that didn't contribute to the deficit. Yes, these insane Bush tax cuts that everybody complains about actualy INCREASED revenues. Throughout the Bush years, tax revenue kept pace with inflation. As a fiscal conservative, that's all I want tax revenues to do. It wasn't the tax cuts that caused the Bush deficits, it was profligate spending.
Obama has finally realized that small business is the key to full employment, yet his stated tax objectives will absolutely brutalize small business owners. You simply can't get people to put 100% of their financial and emotional well-being on the line if the only one who benefits is the government.
Bush understood: the money belongs to us. Obama thinks the money belongs to the government.
So, was Bush perfect? Good lord, no. I don't think he was a great president, or even a good one. However, he was, in many respects, a much, much better president than Obama is turning out to be.
I do feel that Obama is a much more intelligent man, but then, so was Jimmy Carter. I can only hope that Obama gets better as time goes along. So far, though, what I see is almost all the worst aspects of the Bush years. We're still bailing out the rich.
Under Obama we're rewarding the irresponsible at a far greater rate. Sorry, but we all have tight finances and things we want to buy. If you weren't smart enough to read or ask a few questions when you got your mortgage, or you treated your HELOC like a winning lottery ticket, you need to lose your house. The government shouldn't be rewarding your stupidity.
If you ran your car company so badly that you're going out of business, the union's pension and medical funds should be bailing you out, not the taxpayer who doesn't want your cars.
Yeah, this is change we can believe in. We're losing wars, now. Raising taxes. And yet still doing most of the bad stuff we did under Bush... like spending like there's no tomorrow.
There's time. Obama can get better and I think he will. So far, though, he'd have to improve to be as good as the man that many are considering the worst president since the Great Depression.
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