Government Can Fix It All, So It Claims!

From Reuters:

WASHINGTON (Reuters) - President George W. Bush said on Friday the U.S. government was moving aggressively to address the financial markets crisis, but he acknowledged that anxiety was feeding on itself as stocks continued to plunge.

"The United States government is acting; we will continue to act to resolve this crisis and restore stability to our markets," Bush said in an eight-and-a-half minute statement in the White House Rose Garden aimed at calming Americans' growing fears.

The credit markets have remained largely frozen despite coordinated interest rate cuts by central banks and government intervention to safeguard deposits and provide additional liquidity to lenders.

Stock markets have continued to fall dramatically which has drained the value of retirement accounts and limited the ability of companies to raise capital, stoking fears of a global recession and potentially a depression.

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I had an opportunity to interview a SEC lawyer during a seminar at my college and it struck me as odd that he was clamoring for less regulation, especially since he works for a regulatory agency. When I pressed him on the possible future investigations that may come as a result of lax market rules, he defended the SEC by noting that it was the Democrats who imposed strict regulatory rules on the financial markets, most of which were ineffective in design and cost quite a bit of money. Also, he kept insisting that the bailout would be good for the economy, but he kept defending the ridiculous notion that government should not inhibit markets. As if $820 billion is not an inhibitor of free markets in and on itself. I'm sure that once the Congressional hearings begin anew, we will see how well Pelosi and other democrats represent us in this regard. My guess is that heads may start rolling when this crisis is all but done, however we will see an increase in the overt corruption in the Senate and Congress, which my guess is, judging by the latest polling, will skew heavily liberal. I wonder if Pelosi and Reed will be willing enough to investigate and punish those who were charged with the oversight of Freddie and Fannie in Congress. After all, it was these institutions which encouraged our current calamity. It's doubtful that would happen, therefore corruption in a Democratic government will jump, thanks to the snowball effect of "you tell on me, I tell on you."

It's a real shame McCain voted for this bailout bill. I don't say this lightly, but one has to see the dangers of what may come in the future. Consider an Obama/Biden presidency, which is looking more likely than not, and a Democratic controlled Congress. We've allowed our current government to increase it's control on the economy past Keynesian levels, even dangerously close to controlling huge quantities of financials, which weak as they are, can give an Obama White House immense control over our financial institutions. The real blame truthfully should rest with these giant financial powerhouses, which although love to mitigate risk by utilizing complex mathematics and exotic vehicles to structure trades, they cannot foresee the risk of being indebted to the government. Our political and financial leaders have caused trillions of dollars to hemorrhage out of 401(k) and other retirement plans. This issue is compounded further when you understand that 50% of all working individuals in the US are invested in the stock market in one form or another.

One thing bothers me deeply with the Obama/Biden presidency and a government with increased financial control of free markets, and that is taxation. This bailout bill has the potential of real returns but it can also be used as a club Obama can yield to pressure corporations, upper class and middle class individuals to swallow the increase in taxes. This leverage over our financial institutions is poison to our economy and no self respecting, logical, red-blooded citizen should accept. Given the likelihood of victory, Republicans and conservatives in general should be weary of the future. Unfortunately it we can thank president Bush's bailout plan for giving the Democrats a stepping stone from which they can ascend to complete control of the executive, legislative, and judicial branches. We can also blame a divided Republican/Conservative base which for years has stagnated and has not represented a big enough of a challenge to the liberals. So, I consider this current mess we are in, including the potential win of the left, as a wake-up call to Republicans and conservatives who prefer a limited intrusion of government into our daily lives, our faith, and our pocketbooks.

Yet, still I foster the hope that McCain/Palin will ascend to the presidency, although they would have to contend with an contentious Congress. At least, there's still hope that the Obama/Biden campaign will fall flat on its face and lose. There's always hope. Otherwise what can we say to our descendants that we lost hope in freedom? I don't think so.