I try to steer somewhat clear of politics in my blog except when political news directly impacts our economy. Since today it does, it deserves a comment. Not a personal surprise, but evidently a surprise to others, our current administration seems to be declaring a War on profits, wealth and success. This is mind boggling, in that it is disguised as a focus on creating jobs. Since Government controlled Healthcare was thrown aside (which would have impacted our economy negatively), the White House is quickly moving to refocus.
Now, we are faced with a War on wealth generation. Our President wants the very companies who paid back the bailout money (some of it forced on them) WITH INTEREST, to now pay additional fines. Those “Wall Street Fat Cats” need to pay. But let’s look at this: Bank stocks are held in pension funds, private IRA’s, ROTH’s, company 401K’s and within other Private companies, where profits are invested (a novel thought in a free market society – you know the rule – spread your eggs across baskets and it it a GOOD thing to generate wealth). The bank stocks tanked yesterday, pulling down other large companies, no doubt partially due to their ability to now BORROW from large banks, and due to fear that other successful (“Fat Cats”) companies will be next. So in total, over 1.3 billion dollars of investment wealth (including mutual funds that own “healthy” companies) was lost. The stock market moved almost soley due to the President’s words. He is now an anti-banker, which translates to anti-private success. Even US Treasury Timothy Geitner expressed some concern over this decision, while amazingly, Paul Volcker, seems to support it.
Hands off, please, except effective oversight against fraud and corruption. To tackle that – I humbly recommend they first look in the mirror and focus on their own debt accumulation through our taxpayer dollars – and Fannie Mae and Freddie Mac. They are pointing fingers at the private industry, which is based on choice (we don’t have to invest in stock, but most of us pay taxes.) Their efforts should be to clean up government waste and fraud and make certain that what is marketed within the private sector is what it really is (i.e. OVERSIGHT-accurate representation. Few will argue this isn’t needed… As blogged before: there is a difference between oversight and regulation). Ironically GM, Chrysler, Fannie Mae and Freddie Mac who also took bailout money, are exempt from this fine. And they haven’t paid back their debt.
The banking crisis began with easy money, low interest rates loans made to subprime mortgages, frequently government mandated. Yes, there was definite corruption in the banking industry – because greed is a real thing. But what the President is asking for isn’t oversight – it is FINING success. It is demonizing the companies who proved their ability to survive, bounce back, and be profitable. And by the way, banks lend good loans to hardworking people who want to buy homes. And they lend good loans to hardworking people who want to build businesses. And their stock, bought by individuals, mutual funds, and other companies, is healthy because of their PROFIT line. Get it? Most don’t want to buy stock in an unprofitable company.
So in 2008, when some banks were unhealthy due to the above, it was wise to beware of a bank stock until they proved they were able to survive and cleaned up their acts. Now, back on their feet, paying back debt WITH INTEREST, is it wise for our White House Administration to knock them down again? Who is this helping?
I would like to say I’m surprised, but I am not. Our White House administration has little private business background, and from reading some of their biographies – I’ve not sensed a Pro-American business mindset. So now, the first reaction after Health Care failed and Senator Scott Brown was elected by Massachusetts based on worries about the economy and a negative outcry towards the public healthcare bill, is to shift their weight towards the economy.
But why don’t they stop and think? How in the world will this decision do ANYTHING for our economy or jobs? Even Bloomberg, who supported President Obama, now says that this will hurt the financial district in NY, causing layoffs and putting more people on the streets. Maybe our President would rather there be more on the streets to snatch up all those “green jobs” and infrastructure jobs all sitting out there, unfilled. I don’t think it will be the “Fat Cats” who are laid off, what do you think?
Or, the motives could be worse: The administration might not have enjoyed watching a stock market soar after a free-market, pro business, pro American, strong on terror Senator was elected to Massachusetts.
The games people play….It will be interesting to hear the President speak today on the economy. He is supposed to focus on small businesses. Don’t small businesses need loans? Don’t small businesses need the large business stocks to invest in their retirement plans? Don’t small businesses need employees who own homes and are willing to take a chance working for smaller companies because they have personal stability?
Free market capitalism should have oversight against corruption. But not fines and regulations against success. America needs all sizes of businesses. Free market capitalism allows success to be rewarded and attrition of failed ideas or business models. I personally prefer our Administration to declare a real War on terror – on those who hate Free Market capitalism, freedom of religion, freedom in general, those values that have allowed our country to shine, and those who not only want to kill us, but others around the world. It goes without saying, that with freedom there will still be corruption, greed, and free-will choices that won’t be good choices. But the alternative is so much worse. Let the market correct itself, provide incentives for growth – (cut taxes) and get out of the way.
That’s my opinion, anyway. Oh, and by the way, why CAN our country (both our government and individuals) give so much to the Haiti relief? Does it have anything to do with our wealth? Does it have anything to do with our incredibly generous spirit? We are blessed as a nation, and continue to demonstrate our ability and desire to generously bless others.
For once, I’ d like to hear our President comment on the positives of a free-market capitalistic society: freedom, ability to succeed, ability to give, ability to inspire, ability to be strong for others who need us, ability to do good. Isn’t that why we feel gratitude and emotion when we hear our national anthem? And isn’t this why some people still stick their necks out to enter the political world because they believe in what is right about America – not just what they dislike about America? I don’t believe every politician is corrupt. I don’t believe every banker is corrupt. The bad eggs will crack…if freedom of capitalism, freedom of speech, freedom from government overhandedness, and freedom of religion persist. This may sound idealistic, but I’d like to see our President get off the “I/ME” train and the “blame” train, and seek wise counsel as to how to keep us safe, strengthen our economy and preserve our individual liberties. We are what we are due to what is RIGHT about our systems. We should be cautious about tearing down what has worked, rather than fine tuning our oversight. They need to understand that squelching our free spirit is far more damaging than a handful of executives who are greedy Our leaders need to be rational, not reactionary. They need WISDOM. They need to understand the HEART of our country. The ”leader” of our nation and the free world shouldn’t mock a politician or anyone else for driving a pick-up truck.