Friday, December 12, 2008

Brilliant and simple critique of the bailout

A particularly pessimistic investor has up a simple and brilliant critique of the banking bailout this morning. One should note it would apply equally well to the coming auto-maker bailout, and is a reminder of why, perhaps, the Republican party deserved to lose power in the 2008 elections.

"What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics."
Isn't it time to realize that we can't resolve the economy with wishful thinking? It isn't enough to WISH that companies had managed their balance sheets better. It is better to reward those who did, and allow them to become the success stories.

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