Monday, March 31, 2008

USSA - The Union of Soviet Socialist Americas

While the right hand of the conservative movement fights for a more Libertarian country on the Healthcare front, the left hand of the conservative movement is cutting off the right hand by moving towards a completely socialized and over-regulated financial system. Treasury Secretary Henry Paulson has announced the plan of the Treasury in regards to the financial crisis... give it all to the Federal Reserve!

This plan gives sweeping new powers to the Federal Reserve over the free market. This plan would give the Federal Reserve the power of "moderator" to the financial markets, and grant it power to ambiguously "step in" if it determined that there was some sort of a financial crisis. The plan also "streamlines" the institution, in a sense consolidating financial power:
Under the proposal, the Securities and Exchange Commission, which ensures the functioning of financial markets and is responsible for protecting investors, would merge with the Commodity Futures and Trading Commission, which regulates the trading of futures contracts. Meanwhile, the Office of Thrift Supervision would be folded into the Office of the Comptroller of the Currency. The proposal would also establish a new federal regulator for the mortgage industry, affecting both lenders and brokers, which now follow a patchwork of state regulations. Paulson's plan includes other bold moves, including bringing previously unregulated financial entities like hedge funds and private equity firms within the reach of federal authorities and federalizing the oversight of the insurance industry.

In his closing remarks, Paulson warns of over-regulation... but this is exactly the tool that he is allowing the Fed to use!

So where do I begin on this one?

First, as I understand Paulson's strategy, is the further regulation of the market, moving us further away from a Free Market, so as to "save ourselves from ourselves"... I love the "Government can fix it" mentality! Paulson's strategy is the gateway to socialism... not that we aren't already two feet in THAT door!

Look... investing in anything is risky... especially something as unstable as real estate has been over the last decade. When banks "bet the bank" on the goodwill of folks, offering non-traditional high risk loans, they make a business decision that could provide huge profits upfront, but cause their company to collapse in the long run... this is exactly what has happened. And there is nothing that states that the US Federal Government shall bail out thy stupid! Let alone regulating PRIVATE equity firms!

What Paulson has done here is set a dangerous precedent, in that the failure of private industry is no longer going to be allowed to happen. What is going to happen instead is that the government will subsidize failing businesses to keep them open, and keep their employees working... on an indirect government salary. THIS IS THE ABSOLUTE COLAPSE OF THE FREE MARKET.

This proposal is going to be sent before congress... congress, whose approval rating is in the teens, is the last line of defense against socializing the free market.

When the next generation asks "how did we let it happen?" they will look back on moments like these.

I urge you to contact your congressman, contact your senator, call the White House and the Treasury Department... e-mail them, fax them, show up on their doorsteps... Let them know that we WANT to be able to take responsibility for our own actions, we WANT the free market to fix itself, and we WANT the government to STOP regulating and subsidizing the (for now anyway) PRIVATE financial institutions... failing or not!

1 comment:

  1. When I was in high school, one of the students asked our world history teacher, "What does USSR stand for?"

    She replied, "The United Soviet States of Russia"

    Just goes to show you the quality of a socialist public education system.



    PS. Did you see the new Palin biography is coming out next month?