Posted by
Patrick S. Adams on Saturday, November 28, 2009 11:38:20 AM
America is not prepared for success. The bailout, the stimulus plan and the rising debt the federal government is running up to keep car companies, states, banks and brokerage houses afloat is no different than the enabling and denial you read about in books about substance abuse. A year ago, we saw our economy on the brink of "passing out" from excessive lending, poor corporate management and simply awfully written regulatory law. Rather than let it crash, experience the hangover and get back on its feet, we fed it another drink and hoped for the best. We continue to refuse to accept the fact that it's time for our economy to go to rehab.
Shortly before the innauguration of President Obama, this writer
wrote this:
Instead of falling on their faces, the way they are supposed to in a free market system, these ineffective corporate managers are propped up and allowed to keep their failed businesses in tact because they are too big to fail all because some liberals are afraid too many jobs will be lost. So they interfere with that process instead of allowing the banks and the auto companies to fail in such a way that the strongest components of their businesses can be taken over by more qualified, more competent executives with better senses of integrity, industry knowledge and bigger bankrolls.
Our government looks to bailout banks and companies whose management approaches, structure, philosophy and accounting procedures are old school. Those in charge now have outlived their usefulness. In the socially Darwinist world of true capitalism, two of the big three auto makers would disappear, only to re-emerge as stronger, more fiscally sound businesses capable of competing with European companies because they will be owned by a new set of executives and stock holders. Free market capitalism would allow them to become efficient again.
The snapshot in time shows people losing their jobs. The long running movie shows them coming back to better jobs with stronger companies down the road. During the snapshot in time, the blow to the economy would be staggering. There is no sugar coating this. This is an economic crisis, and there are going to be bad things that are going to happen. But no one has ever remained permanently unemployed because their employer went under. They merely struggle until their next opportunity.
This blow can either happen now, with no bailouts, or it can happen later over and over again every time an industry runs into trouble and every time the government has to tap into taxpayer money to fix it.
Yes, I'm saying that bailout or no bailout, a lot of people are going to get hurt. The only difference is, if we can get the hurt behind us now, the companies and the economic system that redevelops later will be stronger, better and less and less likely to be subject to the same type of collapse.
That was written a year ago.
Has the unemployment problem improved after government bailouts and stimuli? Has the credit and housing market opened up (you know, those spickets the Fed was supposed to open with the TARP money)? Do individual households have more wealth today than a year ago? Are corporations any better managed now than they were a year ago? Are we taking in more tax revenue this year than we were last year?
Where are the jobs? Where are the new mortgage products for consumers and new loans for builders? Are even the wealthiest among us poorer today than a year ago? Why are the same practices continuing at companies who took stimulus money? How come taxes are so high and yet the treasury took in less revenue this year than they did the year before?
It's going to be a rough ride, a ride we've already delayed with the methadone of bailouts and stimuli. But the rough ride must occur before we can reignite and unleash the industrial giant that our nation truly is. We must allow old school economic thinking, corporate management styles, regulatory malpractice and taxation structures to go by the wayside before we can return our economic processes to the free market, allow corporations and small businesses to flourish based on free market principles and a tax policy that doesn't punish job creation, stop changing our regulatory policies at the whims of Congress and special interests and put into place long term fraud based oversight policies instead and open up new markets in energy development and health insurance.
Let's get our economy into rehab now, before it's too late. Then we can get on to the road to recovery by lowering taxes, creating jobs from energy development (both conventional and alternative) and lowering health care costs by expanding the role of private sector insurers by allowing interstate competition and focusing more on allowing the catastrophic health insurance market to grow.
If we continue with the policies of the Obama administration, we will end up with the double dip that economists are talking about, continued high unemployment, eventually inflation and finally permanent damage to our economy. If we have to suffer, at least we should benefit from the suffering by making the changes outlined above as part of our recovery program rather than continuing with the same old failed policies of the past.