Thursday, October 2, 2008

Willful ignorance

That's the only excuse for Bob Casey, in his defense of his vote for the even-worse bailout package the Senate passed Wednesday and the House will pass Friday (how can it not, with all those yummy sweeteners?):

I am not happy with the current crisis, and I'm angry about the climate of deregulation and deference to Wall Street over the last eight years that got us into this mess.

Uh, yeah. "Deregulation"? I thought that meant reduction of rules and less government oversight. The kind of thing democrats have been fighting for years with respect to Fannie Mae and Freddie Mac. You're new to this "Senator" thing, so the Wall Street Journal has kindly provided a history lesson. Note the little letters after the names. "D" means democrat—i.e. the party you belong to. I'm sorry that all of the "R" names are people supporting the regulations you now seem to support, but them's the facts.

You should know that Congress has significantly improved the original proposal presented by the Bush administration.

I should, huh? Yeah, all those great improvements like increasing the FDIC insurance to $250k? Because we need to save the morons who like making 0.9% interest on their life savings. Or because we're going to have to monetize our growing debt and what I can buy for $100k today will soon cost $250k. Or because $700 billion in liabilities wasn't enough for you.

As improved by the Senate, the legislation also requires participating companies to provide warrants and other forms of equity so that taxpayers will share in the profits if the stock of these companies goes up as a result of Treasury Department intervention.

This one is especially juicy. I'm not sure how much education you've had in this whole "free market" thing (you really ought to read more), but here's a hint—if no one wants to buy these things that the FedGov is about to buy, it's not because they're big money makers. Investors aren't stupid; bad debt isn't attractive because it's expected to lose money. Sorry—there's just no way the American taxpayer is going to come out of this ahead.

But that's not really the point, is it? It's nice the the FedGov is already in the mortgage business (Fannie Mae, Freddie Mac) and now the insurance business (AIG), so why not expand things? Fannie Mae and Freddie Mac were run with such openness, such lack of corruption, clearly, this is the model for the future! The FedGov ought to get into all sorts of other businesses, and what better time than now, when companies want to unload their bad debt.

F. A. Hayek had a name for this. It's called collectivism, and it's the root of high unemployment in Europe, crappy health care in Canada, and oppression in China.

Buckle up folks. It's The Road to Serfdom, and we're on it.

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