Friday, July 25, 2008

Fight of the American Economic Airline

Let's see, 7,000 mortgage foreclosures per day in the US, but it is a "moral hazard" if we were to bail out a common taxpayer; after all he may have been speculating, or should have been smarter, or should have read more carefully, or just isn't rich enough to care about in Washington.

But yesterday Congress and the President bails out Fannie Mae and Freddie Mac (and Bear Stearns before them), all reckless gamblers in the global casino, yet there is no corresponding "moral hazard." Our federal keepers couldn't even manage to extract a jot of blood, much less a pound of flesh in the bargain. No 5% of future profits into the treasury for taxpayers covering Fannie and Freddie's bad bets, foir instance. Congress didn't even have the cojones to unseat the best paid corporate executives in the world as a price for their bad bets at the money tables.

This is nothing more than socialized risk for corporations and free market pain for the taxpayer.

On this flight of the American Economic Airline, those who have bought their way into the government's First Class section get the Golden Parachutes, while the taxpayers in the back of the plane just have to ride this crippled flight down.

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