I responded to a Meridian article by former White House aid to three presidents, Stephen Studdert, who called for immediate passage of the bailout bill that Congress is considering today.
It would be a great service to all Meridian readers if comments like the one I’m going to make below could accompany the article.
Obviously, Mr. Studdert has been a Washington insider for quite a time and knows and feels what people living inside the Beltway understand. But there’s one flaw in his thesis. He and others have called it an emergency that needs to be dealt with immediately without considering alternatives.
My view is that it should not be a “bailout” using taxpower money or credits, but a “loan” of new money from the treasury with provisions for payback. This was propounded by Newt Gringrich and other conservatives close to the action. We are still a democratic nation espousing free enterprise not government ownership of means of production and commerce. It is wrong for government to bailout private enterprise and it is unnecessary. For example, J.P. Morgan Chase ended up taking over the defunct Washington Mutual and Wells Fargo merged with them, taking care of one of the problem banks, the fourth largest.
Wachovia Bank was taken over by CityGroup. Buffett invested $5 Billion in Leehman Brothers when the price was right. That’s what happens in a free enterprise system. Wall Street understands that more than anyone else. Yes, we have a disaster in the making, but to take the tunnel-vision route that most people are taking and saying “bailout” is the only solution is distasteful to me and, frankly, most Americans are angry at the financial system in this country and at the leaders who weakened lending rules. That includes President Bush, Congressman Barney Frank and others for not ordering the fixing of Fannie Mae and Freddie Mac when John McCain raised concerns two years ago.
There is plenty of blame to go all around, including to those families who speculated in the rapidly rising housing market in 2004 and 2005, knowing they bought a house (maybe on an ARM mortgage that could spiral out of control) only to re-sell for a giant profit. I think Sarah Palin hit the nail on the head last night. There are a lot of us that should be looking inward and taking precautions to clean up our own “house” and internal affairs to make sure this doesn’t happen again.
I am a writer living in Orlando, Florida near the Temple