I have been spending some time this week reading up on the economic crisis. I have been struggling with the question of if I believe our Congress should give the Executive branch a $700 Billion check. Proponents say if we don't do it, then our economy (and the economy of the rest of the world) will collapse. Opponents say that bailing out the market is irresponsible, will saddle taxpayers with a huge debt, will devalue our dollar further (thus hurting our economy and the world's), and may not fix the problem. Some have argued for other solutions such as suspending the capital gains tax for two years. They argue that there is private capital out there waiting for the right price to jump in. Warren Buffets infusion to the market of $5 Billion yesterday sure seems to give this argument some weight. What is the right answer? Honestly, I think all of the arguments have their strong points and their weak points. The bailout check would be used to buy up bad mortgages. Managed correctly (which I don't know if the government can do) this could actually return a profit to the government and to taxpayers. I am always a fan of removing taxes and getting private capital flowing, but is suspending the capital gains tax for two years enough to get that money moving? If we have learned nothing from the Great Depression, we should have learned two lessons. First, business and the market hate uncertainty. It scares them. Businesses will hold on to money, and not invest, until they are sure what the government plans to do. Second, passing laws just to pass laws can sometimes make matters worse. What if giving the Fed's a $700 billion check simply delays a much worse crash?
My wife made me watch Glenn Beck last night. If you didn't see it, you should go look for it on CNN or YouTube. I found the transcript for the show here. If I am recommending you view a CNN program, you really should sit up and take note. Glenn Beck had former Shell Oil executive John Hofmeister on and asked viewers to call in to ask any question they wanted of Mr. Hofmeister. Mr. Hofmeister has a new organization called Citizens for Affordable Energy. While watching that episode, and talking to my wife about the economic crisis and the energy crisis I realized we haven't come up with the correct solution yet because we haven't asked the right question yet. The right question is: When are we going to start legislating like adults, and not like children who just want to feel good?
Go look for articles on the economic crisis. Most of them blame it on the "Sub prime mortgages" or "bad mortgages" or "questionable lending". This is code speak for "loans that were given to people who should have never gotten a loan in the first place." Congress encouraged / forced banks to give loans to people who wouldn't have qualified for them. They did it under the guise of "making homes affordable for everyone." This is the problem. Any sane adult should be able to take a step back and look at the world and realize there are people in this world who will never be able to afford a home. There are charities that have as their goal fixing this. This is a noble goal. However, it isn't a realistic one, and it isn't one our government should be legislating to fix.
Another example is Polar Bears. How? Simple. Recently our government, under the evil George Bush, placed Polar Bears on the threatened species list. Bear in mind (no pun intended) that the worldwide Polar bear populations are at a high point. There are now more Polar Bears in the world than at any point in the twentieth century. Why did they get placed on the threatened species list? Because it "felt good".
We can't drill in water closer than 50 to 100 miles from our shores. Even though the most productive oil rigs are within the 50 mile mark, congress has decided we shouldn't drill there. Why? Sun bathers don't like to see oil rigs. What if there is an accident? Who will protect the birds? The safety record of the oil industry is actually pretty impressive. You have heard of a few spills, but by and large, oil is moved around this country every day and the only time we hear about it is when our gas prices go up. For those of you who think we can get rid of oil and replace it with solar or wind power, you are living in a pipe dream. If you think political environmentalist are going to let you construct wind and solar energy "plants" you haven't been paying attention. Already there are concerns with wind mills killing migratory birds. Sane adults can pass a comprehensive energy plan that uses oil, coal, nuclear, solar, wind, hydro and anything else we can safely squeeze energy out of.
What about our tax code? Here is a colossal waste. We have a cumbersome tax code that is designed to make the wealthiest people in the United States give their money to the "poor". Think Robin Hood with a gun and the federal government. We don't tax business and individuals to keep the government running and for the government to do those things the Constitution gives it power to do. We tax to try and earn votes, and because it "feels good" to stick it to the wealthy and to Big Business. What this really does is to drive businesses over seas and to take money from the people who might be able to bail us out of our current financial troubles.
I have great faith in the American people. At some point, Americans are going to wake up and tell their representatives to start passing laws like adults and not like 60's era hippies. When that happens, you will see a real energy policy, a tax code that makes sense, and as Glenn Beck would say, the few surviving hippies running for the hills while the rest of us chase them there with torches, cell phones, and SUV's.
