The recent reports out of The Heritage Foundation recently brought into focus the dual responsibilities of the government to restrain itself from interference in the free market, and to assure the integrity of the infrastructure of the market system.  Failures to meet either of these responsibilities results in turmoil and can threaten the very liberties set forth in the Constitution.

We are in such a threatening period today.  And there is much to lose if we do not handle this crisis appropriately or effectively.

It must be noted that it is not the responsibility of the government to protect financial firms or businesses of any kind from the consequences of making bad business decisions.  Those consequences should be borne by the people making the business decisions and the firms themselves.

Bailing out these institutions is a form of enablement, and creates dependency on government for fiscal solvency rather than on independent business analysis and evaluations, careful risk management, and keen business acumen.

Furthermore, the bailouts also set precedence.  How can the government legitimately choose to bail out one firm or one business while allowing another one to fail?  Do we really want the government making those kinds of seemingly indiscriminate decisions?

In short, all businesses must be treated alike and allowed to experience the benefits of good decision making or the consequences of failures to adequately assess the market forces that drive profit structure.

However, it must also be said that it is the responsibility of the government to assure the integrity of the infrastructure of the system.  And an underlying foundation of the free market is liquidity.

In short, you’ve gotta have money to make money.

The failure of the Federal Reserve to preserve liquidity in the market deepened the financial crisis that brought about the Great Depression.  Firms must have cash to buy and sell.

And without that cash, there is no market.  Period.

So then, how can the policy makers reconcile these dual, seeming diametrically opposed ideas, to resolve the current financial crisis?

We believe that we are a free people, and many of us have experienced and can continue to experience great economic benefit from a free market system that provides economic incentives for prudent investments.  We enjoy the freedom to invest our resources where we want to invest them.

Yet whether in the stock market or otherwise, none of us particularly enjoys facing the consequences of poor decisions we make.

But face them we should:  it is how we learn to make better decisions.

But will the people truly responsible for these decisions ever face the consequences themselves?
And who are they?  How about Chris Dodd and Barney Frank, heads of the congressional banking committees, to start?  How about all of those politicians opposed to reforming Fannie Mae and Freddie Mac?  Aren’t they the ones who are currently “fixing” the situation?

If history is any predictor of the future, you can be sure that the resulting package will be a fix.
But it won’t be the kind of fix we think.

And fixing the current situation behind closed doors guarantees that none of us will ever know who truly benefits from the changes that will occur.

Our politicians created this mess.  They must bear the responsibility and consequences for the current fiscal situation facing our nation.  Look at how many of them, in both parties, are on the receiving end of benefits from all of these “failing” institutions.

They are the ones who should be held accountable.

They are the ones who failed us with the dangerous combination of complicity and negligence.

But will we face our responsibility for failing to hold them accountable to us?  After all, WE ARE THE PEOPLE OF THESE UNITED STATES.

WE can vote, and we should.

The very people who refuse to listen to the concerns of their constituents, who refuse to develop the nation’s natural resources, who advantage themselves by manipulating “public” policy for their own private benefit should be fired.  We need to vote them out of office.

And then put them in jail…for fraud, and corruption, and for unjustly enriching themselves on the back of common Americans.

But Jean-Paul Sartre, 20th century philosopher, may have said it best: “People flee freedom because it condemns them to the harsh reality of responsibilities and the anguish of hard choices.”
We are facing some very hard choices.

And the harsh reality is that ultimately the responsibility is ours…and the anguish is ours alone.

We must not allow our representatives to “fix” this problem without hearing from us.  We must not fail to exercise our freedom… and our responsibility to vote.

The current bailout package, disguised as a necessary intervention “to avert a far-reaching economic collapse,” is a product of the very men who created the disaster.

Will we allow them now to reinvent themselves as the messiahs come to save us?

This entry was posted on Thursday, September 25th, 2008 at 3:08 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.