I have to admit, I am a huge fan of John Stossel. He has the ability to cut through the BS that the rest of the media and our politicians are feeding us a regular diet of. His latest article cuts through the panic that is racing through Washington as we face a recession.
I have excerpted a passage, but please take the time to read the whole article. It is well worth it.
I liked the headline that the Wall Street Journal gave to an op-ed by George Mason University economist Russ Roberts: “Don’t Just Do Something, Stand There.” Roberts pointed out that politicians can’t wisely spend the trillions they commit, “even if they want to. The information about who needs to be bailed out and who needs to fail is too complicated. . . . It is time to let the imprudent fail and the prudent pick up the bargains.”
What if the government had cut loose GM, Citigroup, and the others, forcing them to do what businesses do in hard times: renegotiate with creditors and revalue assets? Wouldn’t prices have found a more solid floor? We’ll never know. But today the CEOs of those companies would be suckers to drastically revalue assets or sell off a cherished part of the company. If they did that, and then Congress showered their industry with money, they would have cheated their shareholders. Better wait to see what the politicians will do. And so government programs frighten private investors away from making the tough decisions that would start them on the path to real recovery.
Read the Rest of This Great John Stossel Article.
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To all the worshippers of the "free market" I recommend a great book by James Galbraith, "The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too".