The big question on Americans' mind is where did all of this money go? What do we have to show for ourselves? And what could possibly be next? Unfortunately, the answers are always unclear. The lines to cross are always a shade of grey- but that doesn't stop us from speculating.
It looks as if the rich are getting richer and the poor are getting poorer; and there isn't much we can do about it. The proposed Stimulus package was supposed to create three million jobs; however, our unemployment rates have gone from 7.2 to 9.7. Our country is in a major recession; "the deepest our country has faced in the last century," according to Richard B. McKenzie, economy professor at University of California at Irvine and published author. We are becoming less productive and extremely less hopeful.
But could that raise... from the porn industry? Hustler publisher Larry Flynt and Girls Gone Wild CEO Joe Francis recently requested that Congress allocate $5 billion for a bailout of the adult entertainmnent industry. Francis argues that "the US government should actively support the adult industry's survival and growth..." Honestly, I am not convinced that this is necessary, but If the government agrees to this, which they haven't as of yet, what is going to be next?
But it is agreed we ask the government to do something; we want their involvement in some aspects, but I'm not so sure the bailout was the right idea. We want results that we can see, we want our economy to get better, and we want our money going to programs we are going to benefit from. Have the bailouts done any of that?
That is a question I can actually answer: no, no, and no. There is a lot of work to do and time to spend for our country to rise up out of this recession; so maybe our government should start answering questions and showing results- they would leave the public a little less skeptical and a lot happier.
More:
Congressmen's Blog about Bailouts
Monday, November 2, 2009
Sunday, November 1, 2009
Digging a Little Deeper
The first thing we think of when we think of bailouts these days is debt: what the bailouts are costing our country and what they are doing to our taxes. It is a natural thought process, but I want you to dig a little deeper and really think about what these bailouts are costing you, besides your precious tax dollars.
The government bailouts are essentially blending private finance with the government. What does that mean? Arnold Kling, an economist for EconLog, explained this on September 25, 2008 in his post; "when you blend finance with government, the firms have an incentive to manipulate the government and government has an incentive to meddle with the firms." When a company is expecting support from the government, the government then has the capabilities to sway internal managemnet decisions. This also gives our government advantages on who can survive in our economy- they are going to give support to those who will return the favor. Some might chalk it up to survival of the fittest, but this could be the governments way of picking and choosing who remains on top and who falls behind.
In the end a failed business plan is still a failed business plan. A perfect example of this are the banks that are essentially failing, but our government has deemed them too important to come up short. Simon Johnson, an economist with a degree from MIT, posted on October 13, 2009, "Banks failed due to their own mismanagement but how those failures were handled—bankruptcy vs. bailout—was a conscious official decision. This administration deliberately chose to be very nice to the biggest banks and to the people who run them." So it appears that we, the average people of America, the taxpayers, the people who keep this country running, are getting the short end of the stick once again. And what does this do? We are keeping companies who are poorly ran at the top of our economy and leaving the smaller companies in the dust; this diminishes their chance to succeed further and potentially develop a stronger economy in the end.
Government involvement in our private companies are having detrimental effects. We are losing the rights to make our own choices over our country's free market. We are supporting companies that are failing and making it harder for stronger, yet smaller, companies to come forth. When it comes down to it, government blending with our financial sectors is hindering our future progress. So maybe we should think about that the next time bailouts make their way into conversation; the consequences are a little heavier than what we initially conclude.
The government bailouts are essentially blending private finance with the government. What does that mean? Arnold Kling, an economist for EconLog, explained this on September 25, 2008 in his post; "when you blend finance with government, the firms have an incentive to manipulate the government and government has an incentive to meddle with the firms." When a company is expecting support from the government, the government then has the capabilities to sway internal managemnet decisions. This also gives our government advantages on who can survive in our economy- they are going to give support to those who will return the favor. Some might chalk it up to survival of the fittest, but this could be the governments way of picking and choosing who remains on top and who falls behind.
In the end a failed business plan is still a failed business plan. A perfect example of this are the banks that are essentially failing, but our government has deemed them too important to come up short. Simon Johnson, an economist with a degree from MIT, posted on October 13, 2009, "Banks failed due to their own mismanagement but how those failures were handled—bankruptcy vs. bailout—was a conscious official decision. This administration deliberately chose to be very nice to the biggest banks and to the people who run them." So it appears that we, the average people of America, the taxpayers, the people who keep this country running, are getting the short end of the stick once again. And what does this do? We are keeping companies who are poorly ran at the top of our economy and leaving the smaller companies in the dust; this diminishes their chance to succeed further and potentially develop a stronger economy in the end.
Government involvement in our private companies are having detrimental effects. We are losing the rights to make our own choices over our country's free market. We are supporting companies that are failing and making it harder for stronger, yet smaller, companies to come forth. When it comes down to it, government blending with our financial sectors is hindering our future progress. So maybe we should think about that the next time bailouts make their way into conversation; the consequences are a little heavier than what we initially conclude.
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