Random-American

I’m no economist, and I don’t pretend to play one here either.  As a matter of fact, my grades in college-level macro and micro economics were less than stellar.  However, I do like to think I have at least a basic grasp of common sense.  Unfortunately, too many people do not.

When prices are overinflated as compared to real value, it’s said to create a ‘bubble’ in that particular market.  We saw that in the late 90s with the high tech bubble, which began to crash prior to 9/11.  While some saw this as a devaluation, most realists understood that it was a temporary correction and brought prices back to where they should be.  The feds ‘jumpstarted’ the economy by granting tax rebates to taxpayers in the form of a few hundred dollars, hoping they’d run out and spend it to keep the economy afloat.  My, how nice of them to let people have some of their own money back.  Why didn’t they just do that in the first place?  We didn’t need a rebate, we needed to keep more of our own money to begin with.  We needed reality.

Airlines have gone completely bust and the feds step in to give them taxpayers’ money.  Why?  Southwest Airlines has managed just fine to always maintain their business without needing to be bailed out.  If another airline fails, then they should just be allowed to fall by the wayside and another airline will step up to establish a better business model and maintain profitability. 

Then came the housing ‘bubble.’  Shoddy wheelings and dealings by big investment firms and manipulative mortgage brokers got people into houses, who had no business buying a house, or were buying more house than they could truly afford.  The brokers offered loans with a sub-prime interest rate.  However, that rate was only temporary and had actually been an adjustable-rate.  After a certain amount of time, that initial rate would go back up, over the actual current prime interest rate.  Naturally, this would make the homeowner’s mortgage payment go up.  From the business perspective, it was just business, they wanted to sell as many mortgages as they could, and businesses are out to make money.  However, those business practices should also be based in reality and if their own substandard practices lead to them going bankrupt, then so be it.  The feds should not bail them out.  Let the market naturally weed out the businesses that failed and those that are successful will still be around. 

Also, the co-conspirators of the mortgage ‘crisis’ are the individual homeowners who actually signed the mortgage papers themselves.  They are ultimately responsible for their own housing situation.  I could have bought a house, but I did not.  I weighed the pros and cons, recognized my own financial situation and realized that I simply couldn’t afford it at the time.  So why should my tax dollars be seized from me to give to people who made a poor choice, allowing them to stay in houses we all know they can’t afford?  Why should my good decision be punished, and those who made poor decisions be rewarded with my money, and from others like me?  The government should not step in and bail people out for their poor choices, nor should they bail out the mortgage brokers.  They should all have to face the music and, as very elequently put by Michelle Malkin, they should just suck it up. 

But now the feds are proposing new rebates to taxpayers.  If the feds can afford to give us some of our money back (again, how nice of them), then why haven’t they done this in the first place?  Now with the current ‘crisis’ people are scrambling to come up with new ideas of how to keep the economy chugging along at its current rate.  Personally, I think the bottom line is…perhaps we shouldn’t.  The economy and certain sectors that are overpriced should be allowed to ‘correct’ themselves naturally through the open market.  Let the market correct itself without intervention. 

The more the markets, and record-keeping, are artificially manipulated, the worse it will be in the long run.  Doesn’t anyone remember the manipulation of Enron’s books? or any of the other businesses that failed by shoddy practices of tweaking their business records to artificially keep their stock prices high?  By falsely propping up values, it just puts off an inevitable crash. 

And on top of the proposed tax rebate, other politicians are proposing a 40-cent per gallon tax increase on gasoline.  Uhh, what?!  Yes, it’s true.  At a time when Americans are already feeling a crunch from high gasoline prices, these folks, in their infinite ‘wisdom,’ are proposing to make it even harder on average Americans.  So the feds want to give people back a little of their own money, to ’stimulate’ the economy and blow smoke up our collective backsides, but then turn around and jack it back (and then some) in the form of tax increases.  This is sheer madness.  At a time when politicians (especially Hillary Clinton) want to seize the profits of oil companies because they say they’re making to much money, the government now wants to jump on that same bandwagon and seize more money for themselves. 

The average profit made by the oil companies on a gallon of gas is somewhere around $.15 per gallon.  The current federal gasoline tax is around $.18 per gallon, with individual states tacking on additional taxes that average around $.20 per gallon.  And now the feds want to tack on an additional $.40 per gallon?  Madness.  Just who are the ones that are raking Americans over the coals on gasoline prices here?  We’re paying around $3.00 for a gallon of gas.  The oil companies are making about $.15 off of each gallon, but government is currently seizing an average of nearly $.40 (between feds and state) with a proposed addition of another $.40 per gallon.  And they somehow seem to think this will help average Americans?  It’s insanity. 

The stock market has taken a 2000-point tumble in the last couple of months, as investors naturally correct the overinflated market.  That market, which was overinflated in part by artificially ’shoring up’ failing businesses, is now coming home to roost in reality.  Sooner or later, Americans will have to bite the bullet and actually pay for these problems.  The government, the market investors, and average Americans will all have to suck it up.  While getting back some of my own tax money is welcomed, it does nothing to actually address the real problem of too much bureacracy, overregulation, overspending, and poor bookkeeping practices.  Those problems will simply be pushed off to the future, to be harshly faced at a later date, unless they’re dealt with in a rational manner now, with some common sense. 

With world markets being so heavily intertwined, foreign stock markets are also beginning to feel the heat.  Just today, Asian and European markets have also taken a plunge in the face of the current economic woes and uncertainty. 

We, as a country, have to suck it up.  We’re already massively in debt and don’t need new spending.  We have to bite the bullet, and without any kind of artificial ‘fix’ by the government.  If consumer spending is what’s best to keep our economy flourishing, then let us keep more of our own money to begin with.  And just think….the same people who are responsible for our national financial mess and are proposing all these new artificial fixes…this is the same bureaucratic nightmare that some people want in charge of their healthcare?  Uh, no thanks.

*update 1-22-2008 10:34pm* See Michelle Malkin for more on this topic. 

This entry was posted on Monday, January 21st, 2008 at 11:48 am and is filed under All Posts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.