Don’t want restrictions, don’t take the money…

(Copyright 2009)

I don’t mean this to be the refute Tom Sullivan blog site, but I see he’s at it again defending the money hogs who ruined their companies or investment banks by poor investments and outrageous salaries and then hoodwinked lawmakers and the public into granting them bailout welfare.

Mr. Sullivan, a right wing radio voice on the Fox network, is dead set against any rules on compensation tied to bailout money. He is also claiming that the Obama administration is attempting to go beyond attaching strings to bailout money by attempting to limit compensation in businesses not even taking part in the bailouts. I don’t know about that latter part – I have not yet read about such a move, but I would be against it.

But the way I see it is that any business entity accepting bailout money has to accept the rules that might go along with it. While I have heard the charge that bailouts were forced upon banks, I am not aware of the validity of that. I would say if you don’t want to be hamstrung by the government, don’t take the bailout money.

Mr. Sullivan also claims the new name for the USA under the Obama administration is the United Socialists of America.

All I know is that when push came to shove a few months ago, capitalism, in the name of both the Bush administration and nervous investors, blinked and our government did move toward socialism.

I have often heard the charge lately that over the years leading up to our current economic meltdown the liberals in government pressured banks and other lending institutions to offer sub prime loans, those shaky instruments that seem to be the primary cause of our economic disaster. But from what I am aware of there is guilt all around. Liberals liked the idea of easy loans to get more folks into homes and some who called themselves conservatives loved the idea of making tons of money on ever escalating mortgage values, and folks who in times past could not have even dreamed of home ownership (a misnomer since the banks and all the derivative investors really own the homes in the sub prime category) were not complaining.

Lobbyists for the mortgage industry got government to change the rules to allow the sub prime loans and liberals thought it was great too (I know, I’m repeating myself).

Real or traditional conservatives may have been a little more circumspect or downright distrustful of new rules that allowed people to supposedly buy homes with nothing down and then sometimes immediately sell them at ever inflating prices. But during those days when so many people were making so much money, one almost seemed foolish to complain.

But it all came down on us and now the recriminations.

In general I do agree with Mr. Sullivan that the government should not be telling private business entities how to run their affairs and it should not be setting the payroll, and along those lines, it should follow, perhaps, that government should not be handing out money to private entities. But if it must, it can hardly be expected to do so without strings attached.

I have not yet heard an explanation of why CEO’s and others are constantly rewarded for poor performance, except sometimes the apologists claim or imply that the poor performance was somehow the government’s fault. Modern conservatives hate the government, except when they want handouts or they decide people (usually other people) should spill their blood for the cause of capitalism.

It does seem our government is moving into some form of socialism, which is called a “left wing” ideology, but ironically it began a few months ago when a right wing administration started the move toward the left.

Right now the electorate is panicky enough not to concentrate on esoteric right wing, left wing ideology discussions, it just wants something that works.

Personally, I am not sure how effective government intervention in economics ever is. A young, just out of school, instructor taught the only economics class I ever took. He said that the business cycle always goes up and down and government has little effect (except possibly to make things marginally better or worse – I actually added this last part, but I think it went along with his attitude).

I know Richard Nixon (supposedly a conservative), a Republican, did impose limited and temporary wage and price controls back in 1971, with, I think, no major effect one way or the other.

That’s why I think government’s role should be more one of emergency relief rather than administrator of the economy. But I would tend to agree with those who argue government should not do things that discourage investment and the opportunity for individuals to increase their own personal wealth, but then again, who would argue with that?

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2 Responses to Don’t want restrictions, don’t take the money…

  1. llabesab says:

    There is a very simple solution to excessive Executive Compensation that not only upholds the basic principles of Capitalism, but also subscribes to the Democratic Party desire to “..soak the rich”, while at the same time affording tax relief to middle class taxpayers. It’s one even our Mensa challenged Congress should be able to understand since Congress set the principle about 25 years ago. Simply amend the Tax Code to not allow any business deductions for any salary over, say, $1 million. Thus, if Citibank wants to pay their Chairman $50,000,000 as a “sweetheart” package–let them. That upholds the principle of Capitalism–no government interference. But Citibank would then have to fork over to the IRS taxes on the $49 milliom excess. The precedent was set when Congress no longer allowed corporations to deduct 100% of their entertainment expenses–only 50%. Go Congress! Go!!

  2. Editor says:

    The difference between socialism and capitalism? Under socialism, banks are first nationalized and then go bankrupt. In the capitalist system it appears to work the other way around.

    Read more on Crunchreport.com.

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