Bailout Fascism Passes ( Archived) (2)

Written by Becky Akers
Friday, 03 October 2008

"Our entire economy is in danger," President Bush alleged in his prime-time address last Wednesday. So endangered, in fact, that he urged us to commit it to a government running a deficit of almost $10 trillion and buying $800 toilet seats.

"Without immediate action by Congress,” Bush continued, “America could slip into a financial panic…”

The American people weren't buying it, so they flooded Congress with phone calls and emails telling their representatives to vote no on the bailout. The bill was rejected by the House, but passed by the Senate.

Today the bill passed in the House by a vote of 263-171.

Bush's ominous message of economic disaster is from the same man who swore Iraq had WMD’s. But let’s presume he’s told the truth this time – and let’s also presume he’s correct that “irresponsible actions by some undermine the financial security of all."

In that case, our economy is already far more centralized than most Americans suspect. And this vote is an underscore to that centralization.
What exactly is an economy? Dictionaries define it as “the production and consumption of goods and services of a community regarded as a whole.” Each time you buy a donut, work for pay, or hire a babysitter, you participate in the economy. Billions of these transactions occur daily, some immense (buying a car, a house, a company), some so tiny only the taxman cares.
How can the failures of even the largest institutions affect all these exchanges? They can’t.
That’s part of the free market’s beauty. It’s unlikely many banks will simultaneously take the actions that lead to failure – unless the government compels them to. Which is precisely what it’s done for decades.
Any pundit or economist who claims otherwise, who blames the economy’s foundering on a lack of regulation rather than the government's stranglehold, is either a liar or a fool. We can cure him of his delusion real quick by dropping the Federal Register on his foot.
Not the entire Register, of course: goodness, we don’t want to permanently cripple anyone. We’ll use only those volumes listing financial regulations published this year. No doubt, while the doctor sets his broken bones, our chastened convert will agree that a laissez-faire philosophy is not the problem.
Meanwhile, absent regulatory compulsion, a bank that lends money to borrowers who can’t repay, or that invests depositors’ funds recklessly, deserves to fail: that’s how the market polices itself. If you’re not a shareholder or customer, the failure won’t directly affect you – again, unless the government steps in. When the State rescues monstrosities like Fannie Mae and Freddie Mac – quasi-private firms the Feds established to do precisely what no private lender would: guarantee risky mortgages – it shifts the consequences of bad decisions from the politicians, regulators, and companies that made them to the country as a whole.

Continued...