Fox News Channel put out a wonderfully concise show on what happened and what it all means. You can find the whole thing on YouTube if you visit The Next Right.
I learned a few things from watching it, and I thought I was remarkably informed on this topic. First, this isn’t anything new. Banks in the US have been overextending themselves with bad loans on more than one occasion in our history. In fact, this is the 6th time we’ve been here, in this exact position. Well, except this time the American Taxpayer is taking the fall for it all.
Michelle Malkin brings up a good point: Wasn’t the Bailout Supposed to Calm the Financial Markets?
And it turns out that the same chorus that is screeching we needed to bailout Wall Street is now screeching that $700 billion is not enough. (link)
Interesting.
If we live in a society where our economy is propped up by political leaders taking money by force from the people, we do not live in a free society. We must establish a few ground rules in how government relates to the economy.
First, if you live or die, economically, you live or die on your own merits. If you aren’t productive enough to even feed yourself, you aren’t productive enough to even feed yourself. That means you don’t get food taken out of the mouth of someone else. Instead, you are left to the mercy of others. Pray that others are merciful or bread plentiful enough that people can spare.
Second, government should never be an active participant in any marketplace. Either there is a market, or there is no market. When government acts as a buyer or seller, there is no market. Government’s job is to be on the sidelines as a referee, ensuring that the laws written to keep the marketplace working are kept. When the referee takes sides, there is no longer any justice.
Third, sometimes life stinks, really badly. It stinks because we do things that are bad. It stinks because other people do things that are bad. It stinks because sometimes a tornado comes out of the sky and levels entire cities. It even stinks sometimes because you were born that way. That’s life, and it’s no amount of government money or interference is going to change that. Government cannot right the wrongs of a seemingly unjust universe, and we shouldn’t look to government as if it could. Government can only punish, with the worst punishment being the death penalty. But punishment, at best, gives us the satisfaction of justice and the peace of mind of deterrence. It is hardly a savior or redeemer, a powerful supernatural force that can bring justice and mercy into a universe of seeming chaos.
If we took these common sense attitudes to heart, we wouldn’t be looking at Wall Street as we are today. Yes, it’s a tornado, and it’s going to hit everyone who depends on money. But no, we don’t have to enslave ourselves to bail us out of it. And, absolutely no, government is not going to make markets “better”.
It’s probably better that we keep our money ready to bail out our own families and businesses. That would limit the effects of the storm more than anything else.
Oh, by the way, why are markets getting worse? They aren’t. Markets aren’t good or bad. They just are. Prices go up, prices go down. Price movements in either direction, even prices remaining perfectly still, benefit us. There are new opportunities today, definitely, opportunities smart investors are exploiting as we speak. And we only have those “bad” markets to congratulate for it.
You could spend an entire lifetime of study and still have no explanation for why prices go up or down other than people are willing to spend more or less for the product.
