Stock markets around the world surged upward yesterday (see here). Today the euphoria ended (see here). So is the credit crisis it over? No one knows. Nonetheless, I suppose we should feel some relief. Panic is never a good thing.
Fear, however, can be helpful. Consider the plan to deal with the crisis.
The government put itself four-square into the country’s banking business Tuesday, resorting to what President Bush conceded was the unwelcome choice of buying into the system to loosen paralyzed channels of credit.
The president said the decision to buy shares in the nation’s leading banks – a kind of federal intervention not seen since the Depression era – was “not intended to take over the free market but to preserve it.”
But the administration was clearly conflicted by the action.
Said Treasury Secretary Henry Paulson: “We regret having to take these actions. Today’s actions are not what we ever wanted to do – but today’s actions are what we must do to restore confidence to our financial system.” (from here)
With their huge investment in banking and insurance institutions (see here too), is our leadership taking us where we want to go? Do we want to continue our slow, but seemingly relentless drift towards State Capitalism?
President Bush is obviously uncomfortable with this move. So why then is he taking us this direction? The answer, I fear, is that is where we want to go. We are having a party; we show no sign of wanting it to end. Saving is ever so much harder than spending. Saving is boring…..
Until Bush confronted Congress with his 700 billion dollar bailout bill, he and his fellow Republicans had had little success in garnering public attention to this problem through the news media. Consider, for example, this May 2006 note by Senate Republicans to their leadership.
We are concerned that if effective regulatory reform legislation for the housing-finance government sponsored enterprises (GSEs) is not enacted this year, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. Therefore, we offer you our support in bringing the Federal Housing Enterprise Regulatory Reform Act (S. 190) to the floor and allowing the Senate to debate the merits of this bill, which was passed by the Senate Banking Committee. (Click here for more)
This news media simply is not interested in this note. Why? Undoubtedly, there is great bias in the news media, but we also have ourselves to blame. If we are unwilling to partake of informative news, the news media will entertain us instead. By the same token, if we do not insist upon electing and supporting leaders willing to do the right thing, we will get leadership that does the easy thing instead.
Has your head been in the sand? Are you finally willing to listen to people who saw this fiscal debacle coming at us years ago? Then I suggest you take the time to listen to these broadcasts from Focus On The Family.