Tag: economic policy

Categories
free trade & free markets national politics & policies too much government

Don’t Bank On It

It’s not a chorus.

If you’ve been watching the “debate” over how best to con American voters into giving troubled banks $700 billion for bad loans, you might think it’s a chorus in the financial industry, especially from bank presidents.

You might assume they’re all shouting: GIVE US THE BAILOUT MONEY! NOW!

Not so. At least one banker dissents. John Allison, president of BB&T — with $136 billion in assets and 1500 branches — sent an open letter to Congress protesting the bad economics behind the bailout. He notes that his own company, though affected by the downturn, is in a much stronger position than many of BB&T’s competitors.

Why? Well, his bank did not join the orgy of bad lending, despite the enticement of the Federal Reserve’s easy credit policies and government pressure to give loans to bad-​risk borrowers.

So why should the government reward the bad economic conduct of institutions that played along with the bad government policies? Why make it harder for the economy to recover by punishing sound and productive economic conduct with burdensome new government taxes?

Allison thinks the debate has suffered from domination, as he says, by those “financial institutions [that] made very poor decisions.”

Perhaps it’s because politicians have a whole lot more in common with foolish decision-​makers than wise ones.…

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Bootless Economic Policy

When I was a kid, what we now call flip-​flops were called thongs. When I use the word “thong” about footwear, today, I get funny looks from the kids.

Whether it’s today’s thong, or yesteryear’s, both are skimpy. When you walk, the footwear goes “flip flop, flip flop”; what happens to the underwear, well …

Modern Democratic Party economic policy is like the underwear — it quickly creeps into uncomfortable places. Republican economic policy resembles the Democrats’, but also the footwear. Take John McCain’s economic policy: “flip flop, flip flop.”

Recently, McCain pompously took credit for “putting” and “keeping [Americans] in their homes.” Give me a break! He’s not paying the mortgage. I liked it better when, after the housing bubble began to burst, McCain said we should be wary of subsidizing bad business decisions with a massive bailout.

But not long after saying that he then specified a whole bunch of bailout measures. Flip. Hillary Clinton chortled that at last he was getting it, but he wasn’t going far enough.

His basic problem, though, goes back to his philosophy. He said that he’s “committed to using all the resources of this government and great nation to create opportunity and make sure that every deserving American has a good job and can achieve their American dream.”

Flop. To ensure his goal, he should not use all the resources of government!

Sometimes less is more. Like … sandals.

This is Common Sense. I’m Paul Jacob.