Our favorite capitalists, President George W. Bush and Treasury Secretary Henry Paulson, recently got together and decided that it would be a good idea to take an additional $250 billion of taxpayer money and buy up the nation's major commercial banks.
Call it economic rescue. Call it a bailout. But however you shake it, you have to call it market socialism.
This is not an entirely new concept. In the Stalin-led 1920's Soviet Union, they called it the New Economic Policy (NEP). In Hungary it was known as "goulash communism." Under Mikhail Gorbachev it was called perestroika.
But no matter what you called it, all market socialistic economies have ended up with one common result: failure.
But why let a little thing like history stop us from centralizing our economy?
This is the government's big chance. Since Americans are so scared about what will happen to the economy, they are willing to go along with just about anything, including nationalizing the nation's top banks.
Our president calls this a "last resort"; I call it a cop-out.
Bush says, "These measures are not intended to take over the free market but to preserve it."
I call it the beginning of the end of our free market economy.
Under Bush and Paulson's plan, the U.S. Treasury will buy non-voting preferred shares in major financial institutions, with stakes in each limited to $25 billion. Bank executives must accept limits on their pay and standards of corporate governance.
Many people will say that the government will not be micromanaging these banks because their shares will be non-voting.
Banks must accept individual standards of corporate governance set by the U.S. Treasury.
Well, what is corporate governance?
Corporate governance is the set of processes, customs, policies, laws, and institutions that affect the way a corporation is directed, administered or controlled.
So by the federal government controlling corporate governance, they are controlling the banks, and do you know what that's called? It's called socialism, stupid!
America needs to wake up. We need to realize what is happening right before our very eyes.
I'm surprised people aren't marching on Washington, D.C. right now demanding that we not become a socialist country.
This is an outrage.
I also want to know why the banks have agreed to allow the federal government to take over.
According to Secretary Paulson, nine banks that he described as "healthy institutions" agreed to accept government stakes for the good of the U.S. economy.
For the good of the U.S. economy, or to save their own you-know-what?
Having the government come in on top of the $800 billion bailout to make the banks' landing softer is a cop-out on the parts of the banks and the government.
The banks should stand up and create new ways to solve their problems and not rely on a government handout to fix everything.
Instead of crying about how much money they are losing, the banks should be resetting these bad mortgages to market prices and fixed rates.
This will not only keep people inside their homes but will save the banks money from legal fees and other foreclosure-related costs, not to mention the banks would have cash-flow again, because people can now pay their mortgages.
In a market economy, that's what the banks would be forced to do: compete, and create new solutions to market problems.
But instead, they have a government band-aid, and the government will soften their fall.
It's times like this where I'm reminded of Ronald Reagan and his wisdom in handling government.
Reagan once said that the 10 most dangerous words in the English language were: "Hi, I'm from the government, and I'm here to help."
That's what's happening today. Hank Paulson, Ben Bernanke, and George W. Bush came to the banks and told them that they were here to help.
Now we have the biggest government spending in history, and the nationalization of our banks.
So when you hear things like "greater good" and "last resort" from your elected officials about how the government needs to help failing banks, try telling them this: "It's called socialism, stupid!"
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