Tuesday, September 23, 2008

"It's financial socialism"

I'm not someone who is very politically active, but the call to follow Jesus is certainly a call to politics of a sort. "There's a new Caesar in town," they say. The Treasury's proposed $700B bailout of investment firms is quite the conundrum, and I'd appreciate others' voices on this as well, especially thoughts marked by Scripture and Jesus' teachings.

Most of the companies getting bailed out are mortgage companies which rise and fall upon property values and people's desire and ability to buy and build homes. Others are investment firms tying up billions of dollars of Americans' retirement money. If these companies disappear, so might your 401(k) or 403(b). With failed mortgage lenders, fewer people can buy or sell homes, further crippling our economy. With dead investment brokers, more money is withdrawn from circulation as people scrimp and save for the rainy days ahead. With these problems in view, it sounds like $700 billion well spent.

But something feels a little too "Big Brother" about all this. In a recent CNN.com article, senator Jim Bunning of Kentucky (who also happens to be a former Detroit Tigers pitcher) said that "This massive bailout is not a solution. It's financial socialism and it's un-American." About as un-American as eminent domain, I say! The U.S. Treasury now owns 80% of AIG, which means that it basically controls its operations. If they do this enough times, how far apart from Communism will we really be?

To add to that, why should I shoulder a massive tax increase to pay off someone else's mortgage? Worse yet, why should my tax dollars help rescue firms whose executives have made millions and tanked their own company through irresponsible greed? After all, that's what the subprime/adjustable-rate mortgages were all about, as I see it. Homebuyers weren't disciplined enough to save money; they wanted homes now and bit off more than they could chew. Lenders wanted high-interest revenue from myopic lendees who failed to see how stupid and irresponsible it is to take on a high-interest loan with no fixed rates. Both were greedy, and now both are hurting. Will the Fed's deus ex machina end up sanctioning such behavior? It's not unlike having an abortion: Neither party thought about the future; they wanted only the moment's pleasure. But instead of learning accountability for one's actions by keeping the child, let's just let them have a quick-fix abortion instead. Sure, that's sad, but at least it gets out of the way and life can get back to normal.

Of course, you see that my Libertarian tendencies are peeking through a bit. I realize that this is a huge deal for many common people's livelihood. No, our present economic crisis is probably not what the media would like to have you fear, but it's still nonetheless a call for sobriety. We (read: I) need to have grace and compassion on those who erred, even sinned (gulp!), in this ordeal: I too will likely be a homeowner someday. Perhaps the government's rescue is a necessary evil.

What's a good government to do? And, dare I ask, What would Jesus do?

Ron Paul (remember him?) also has some helpful insight on this economic SNAFU which is now FUBAR.

1 comment:

Litl-Luther said...

Thanks for posting this Andrew. Personally I think our country’s obsession\addiction to mammon is the root cause.

I'd like to see no bailout take place whatsoever, even if that meant a mini-depression. The government is mainly bailing out the rich who got their selves in the predicament they are in through greed and stupid choices. I'd like to see the consequences of it all run its course, including upon home owners who took out flexible mortgages. What a stupid thing to do! And since when should we pamper, reward stupidity?

Am I too harsh?