Word on the street has it that Chrysler has returned the vast majority of the money the United States government gave it as part of a federal bailout. For many, this is evidence that the bailout worked and now things can go along just fine. While most understand that the government hasn’t gotten all of its money back, they expect that to come with the IPO of the 8.6% of the company’s stock that Uncle Sam owns.
What gets missed by these folks is that this was still wrong.
Federal bailouts aren’t new. They weren’t even new for Chrysler since they received one thirty years previously. They’ve been around for a while now and are all examples of Uncle Sam picking winners and losers. Federal bailouts, ostensibly a method of preventing job loss, are hardly universal. They go towards large corporations who are now struggling, but ignore newer companies that may be struggling due to all kinds of factors that aren’t mismanagement.
So Uncle Sam writes a check to Chrysler or GM, and then tells the new start-up that they’re just flat out of luck. I don’t have a problem with telling the little guy he’s out of luck, the problem is in not telling giant corporations the same bloody thing.
Business is risky. Anyone starting a business stands to lose. However, with that risk comes the potentially great rewards. Bill Gates risked everything on Microsoft, and it worked out just fine. For others, not so much. That’s natural. Everyone can’t win, despite our hopes and wishes. If so, there wouldn’t be the opportunity for a few hardy souls to venture beyond what you and I know and forge a new frontier.
We all have a vision of how to get this nation out of this funk we’ve been in for a while now. It’s clear that despite various ideological paths, many of us believe that the current path is wrong. As a libertarian, I’m a firm believer that the correct path is pretty clear. However, nothing will improve until we start making personal responsibility a key factor in the lives of Americans.
With the housing crisis, we all heard horror stories about people who were losing their homes. We were told that these people were the victims of predatory lending practices, which may or may not be true. What got missed was that these people still bought homes they couldn’t afford and took on loans with adjustable rate mortgages, not knowing what they were in store for.
The truth of the matter is that many of these people were simply refusing to accept responsibility for their own mistakes. They weren’t alone either.
TARP was all about bailing out bankers who didn’t want to accept their part in giving loans to people who couldn’t actually pay them back. They danced around the issue and begged for government money to cover their mistakes.
The truth of the matter is that fewer and fewer people are being made to accept resonsibility for their own actions. A police officer once said to a friend who’s business partner was murdered in a hold up that he needed to keep in mind the man coming from an disadvantaged upbringing. The officer didn’t seem to grasp that Oprah Winfrey did too. One of them isn’t knocking over bars in their spare time.
The reality is that the lack of people being held accountable for all of their actions is a key reason this nation is in the state it’s in today. Maybe if we can change that, we can actually make this nation what it once was, only better.
Newt Gingrich, former Speaker of the House, will announce his bid for the Republican nomination for president at some point tomorrow:
Former House Speaker Newt Gingrich (R-Ga.) will announce his candidacy for president Wednesday, spokesman Rick Tyler said Monday.
After an Associated Press report that Gingrich would make a 2012 bid official via social media Wednesday, Tyler confirmed it on Twitter.
Tyler said Fox News host Sean Hannity will have the first interview with Gingrich as a declared presidential candidate ahead of the former House Speaker’s speech to the Georgia GOP convention on Friday.
If you’re looking for Republican that has enabled big government, then Gingrich is right up your alley. In Buck Wild: How Republicans Broke the Bank and Became the Party of Big Government, Stephen Slivinski offers insight into the slide that eventually led to the spending spree of George W. Bush and a Republican-controlled Congress. Silvinski gives example after example of how Newt Gingrich sold out of political expedency and threatened members of his own caucus if they didn’t vote how he wanted.
Many people believe that the most moral thing a person can do is to help other people. This line of reasoning is common in most theological systems as well as it being the general sentiment of people in this nation as a whole. I don’t disagree with this, but I think where I part ways from most is what that represents.
To me, the highest moral is to give people the freedom to succeed or fail solely based on their own abilities. To allow them to achieve as much as they can based on their own resources sounds callous to some, and I can see why. After all, not everyone will succeed, so why not provide some kind of safety net?
First, the risk of failure is what motivates some people to push as hard as possible towards success. The idea that there is no safety net to catch them pushes them forward with a “there is no tomorrow” attitude. That attitude makes them more determined to succeed than ever, and a safety net would ruin that very thing that helps them.
Next, the idea of a safety net infuses failure into the hearts and minds of many people. Failure happens, but it is not something we should be completely accepting of. While doors shouldn’t automatically close to those who have failed at something, society does more good for people if they treat failure as it is rather than pretending that there’s no harm at all in it. There is. You failed. We’ve all done it, but most of us felt shame in that failure, as we should have. I did, and it’s helped push me to achieve as much as possible. I’m not alone. Many people I’ve spoken with through the years have shared a similar story with me.
Given his all but certain entrance in the Republican presidential primary, you’d think that Newt Gingrich would be shifting to the right on economic issues. He’s not. In fact, he recently told a reporter during a press conference that he doesn’t regret expanding Medicare, an entitlement already projected to have trillions in unfunded liabilities over the several decades, by supporting and lobbying for passage of prescription drug benefit - Medicare Part D - in 2003:
At a press conference on Friday, CNSNews.com asked Gingrich, “You were a prominent supporter of the Medicare prescription drug plan that President Bush signed into law in 2003. The Medicare trustees now say that plan is $7.2 trillion in unfunded liabilities over the next 75 years. Do you regret your support for the plan looking back?”
“No,” said Gingrich. “I think that we—I mean, I am for dramatic reform of Medicare. I chaired the Medicare reform task force which saved it in 1996 when the trustees said it was going to go broke, and we passed changes which enabled them to say that we had postponed any problem for well over a decade.
Here is the video with Gingrich’s full comments:
Here’s your “no sh*t” moment of the day. The TARP “watchdog” says that the bailouts have made “too big to fail” part of public policy:
The watchdog for the Troubled Asset Relief Program (TARP) issued its final verdict on the bailouts Wednesday in a mixed report that credited the program with stabilizing the economy but warned that a “too big to fail” mentality might persist.
But the group noted that the extraordinary intervention might have ingrained a “too big to fail” mentality in the financial markets, and perhaps in corporate America.
“By protecting very large banks from insolvency and collapse, the TARP also created moral hazard: Very large financial institutions may now rationally decide to take inflated risks because they expect that, if their gamble fails, taxpayers will bear the loss,” the report stated, adding that government efforts to save domestic auto manufacturers might have spread that hazard to non-financial institutions as well.
“The implication being that any company in America can receive a government backstop, so long as its collapse would cost enough jobs or deal enough economic damage,” the report stated.
Of course, they also claim the bailout was crucil to ensuring stability. Well, when you’re giving out taxpayer money to institutions that made poor decisions and would have otherwise failed, I’m sure they were relieved. But when the next economic troubles happen - whether it’s financial institutions or an auto industry producing cars no one wants, bailouts will be the policy of whatever administration is in power and Congress.
NBC Nightly News focusses on Ohio Rep. Dennis Kucinich’s efforts to find out where TARP money handed out to struggling banks ended up.
NOTE: There’s some subtle humor in this video when NBC uses Jay-Z’s song “Big Pimpin’” as background music when talking about Dubai.