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Politics - Stop the Bailouts of Businesses That Cannot Survive on Poor Management

By Ed Bagley

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Published: 30May2009
Word count: 486
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Copyright © 2009 Ed Bagley

Stop this American nonsense of government bailouts with taxpayer money for businesses that cannot survive because of poor management.

Let the poorly run businesses collapse and sink into bankruptcy, foreclosure or receivership, and be sold to businesses with better management that can take these distressed enterprises back to profitability.

Throwing good money at poorly managed businesses is never a good idea. It will make the problem worse. Only a government bureaucrat would think that a bailout is a viable solution to a business problem or a financial crisis in our economy.

Get the idea out of your head that just because it is the Federal Home Loan Mortgage Corporation (better known as Freddie Mac) or the Federal National Mortgage Association (better known as Fannie Mae) does not mean that they cannot be brought to their knees and punished for their poor management.

These two stockholder-owned corporations were chartered by the U. S. Congress in 1968 (Fannie Mae) and 1970 (Freddie Mac) to promote home ownership. They buy mortgages on the secondary market, pool them, and sell them as mortgage-backed securities to investors on the open market. Freddie Mac and Fannie Mae own or guarantee about half of America's $12 trillion mortgage market, and they have made a sorry mess of it in their rush to riches at our taxpayer expense.

Congress chartered these two enterprises, and government bureaucrats and politicians were asleep at the switch in allowing these enterprises to be motivated by greed and avarice. It happened because the business managers of these two enterprises were just like the government officials and politicians who backed them, caught up in an intense desire for wealth and power.

Shame on them, shame on them all, and especially the politicians who were elected to represent us and chose to line their pockets instead with campaign contributions, and look the other way as if nothing improper was happening.

The government administration, led by our new President, has decided that the two congressionally-chartered business, big insurance companies, big banks, big finance houses, and big automotive corporations need to be bailed out at taxpayer expense because they are too big to fail. This is absolute nonsense. All of these enterprises should have been allowed to fail, otherwise, very little will be learned, retained and applied by the enterprises involved.

By bailing them out, we are enabling them to continue their undesirable motives of greed and avarice. We are paying them to fail and just asking for them to sell us?the taxpayers?out.

Just as social engineering attempts to change our thoughts, beliefs and mores about our social problems, financial engineering is now attempting to change our thoughts, beliefs and attitudes about our economic problems.

But is financial engineering a good idea in a free, democratic, capitalist society? I think not. The jury is out at this time in America's economic history. Time will tell whether I am right or wrong.

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