This morning I read a headline on CNN.com that made me shudder: "US Plan to Buy Toxic Assets Near"
Follow me here. If an asset is toxic for a bank, it means that the bank made a decision to make a bad loan, and is now suffering the consequences of that decision by losing money.
But now the federal government comes in and says, "Oh no! You're having to deal with the consequences of your bad decision. It must be so hard for you, and it's hard on the rest of us too. So listen to us. We have a plan. We're going to pretend that you never made a bad decision. We're going to take away all the consequences so you don't have to feel any more pain. What we're going to do is force someone else to take on your pain, an innocent person who had nothing to do with your bad decisions. Now the innocents will have to deal with the consequences of your decision. You, on the other hand, are totally off the hook. Now just go back to being who you were before, and, by the way, don't worry. If you ever make a bad decision again, we'll be here for you.
Now the absurdity of the above situation ought to be obvious. It's exactly the same message we send when we legalize the killing of unborn children. We're essentially teaching people that the consequences of their actions don't matter, that they can do whatever the heck they want and not accept the consequences of their actions (90% of abortions are performed as a form of birth control; look it up).
Just as innocent children are the victims of abortion, the innocent American taxpayer is the victim of these absurd government bailouts. If the US government were a parent, they might be voted "worst parent ever." After all, what good parent would allow their children to escape the consequences of their bad decisions? It's just plain dumb. When you remove the negative consequences of a bad decision, the person is much more likely to keep making the same bad decisions over and over again.
This much ought to be obvious. But apparently the Obama administration doesn't get it, and the Bush administration didn't get it either. Since when has the free market functioned properly with heavy government intervention? The answer is...never. The only role the government ought to play in a free market is to ensure ethical behavior and create policies that keep government as far away as possible from business, so that the market can operate with as few restrictions as possible. It's that kind of thinking that allowed America to become the world's most powerful country in a ridiculously short amount of time, and it's that kind of thinking that will help get us out of the financial swamp that is now drowning us.
But the Obama administration seems hellbent on making sure we stay in this swamp. With each government bailout, with each company that is "rescued", the taxpayers of America are becoming the shareholders in some of the worst investments in history. I'll ask you, would you, voluntarily, buy stock in AIG right now? General Motors? Citigroup? But wait, YOU ARE buying stock in these companies. The Obama administration is FORCING you. You don't have a choice. You ARE a shareholder in these companies, and there's nothing you can do about it.
These bailouts, which the government is calling "public-private partnerships," are not partnerships at all. Last I knew, a good partnership was something into which both parties voluntarily entered for mutual benefit. Yet I see no benefit at all to the taxpayer in this "partnership", and make no mistake: nothing about this is voluntary. All we get is a bigger tax bill and horrible investment losses. On the other hand, the companies that caused these problems are making off like bandits. The government is telling them that it's okay for them to unload their toxic assets on the citizens, and is basically forcing us to take the blame for the banks' bad decisions. Now call me crazy, but that's no partnership.
But wait, aren't I missing the point here? Once our government forces us taxpayers to buy stock in these poorly-run companies, the companies will surely be in better health, right, and the country back on better financial footing? Not so fast. Who is to say these companies won't continue making the same bad decisions? You've heard the saying, "The best predictor of future behavior is past behavior." Well believe it. When individuals or organizations don't face consequences for their bad decisions, the likelihood of them repeating the same mistakes is very high.
So here the government is, anointing themselves saviors of the economy, the knights in shining armor, when in fact all they have done is encourage the offending companies to keep up with business as usual. Just like the irresponsible individuals who continue to have unprotected sex, knowing they can easily get a government-approved abortion the next day, these poorly-managed companies will keep on making poor management decisions, knowing full well that big brother government stands ready and willing to bail them out, again.
God help us.