Friday, October 3, 2008
By DB on Oct 4th
Only time will tell if this bailout will work, either way this bailout has effectively put free market capitalism in the United States into a coma that is quickly inching towards, dare I say, socialism. Let me tell you another story as complicated issues like this are best explained in metaphors (and are far more entertaining).
Imagine a person, we shall call him Dick, who is your average guy (Wall Street). He has gotten used to living under his parents sheltering (regulations) rather than learn from his own experiences (free market theory). This sheltered life has allowed him to avoid all learning experiences and has become accustomed to the rules. Dick has now turned 18 and moves out on his own and no longer is forced to live by the rules of his parents (deregulation). Dick does well at first as he is a quick learner. Dick, not being constrained by his parents, is able to live large and he finds that the bigger the risk, the bigger the payout (risky market behaviors due to greed). Despite warning from his parents (Congress and the Pres), Dick becomes even more riskier and much more successful. His parents warned Dick, but they neglected to follow up on the warnings and let Dick be Dick.
Suddenly Dick collapses after a night of drinking. Despite not having many symptoms, Dick decides it is liver failure and quickly requests a liver transplant (bailout). The doctors (free market capitalists) tell Dick that this is a result of his risky behavior and has nothing to do with his liver, but with some self control, he will get through it. Dick just wants the easy way out, so he asks his parents to get involved despite his insistence over the years that they leave him alone. The doctors tell Dick and his parents that it might be tough for while he detoxes and learns from his experience, but he will become stronger in the end by simply policing himself. They say his body will recover and become much stronger because of it. His parents are powerful people who think being parental is to save their kid through bailing him out rather than let him learn on his own and god forbid his parents be seen as not acting during a crisis!
His parents decide to pay for a liver transplant (bailout) using the family trust accounts (public tax money), despite the fact that the majority of the family members (the public who are paying for the procedure) are against it because the doctors warned them of the financial impact to them simply to save this spoiled brats liver, even though they can't guarantee it will save him. The parents, in typical fashion, ignore the family members and decide to pay for the transplant.
The mother (House Reps who voted against the first bill) is against the transplant as explained to her, but is quickly convinced of its need when the father (the House and Senate leaders) decides to throw in some cosmetic improvements (bigger bill, bigger bailout), like a nose job the mother, to convince the mother to go along with it. The mother was initially against the procedure as a matter of principle, but for some reason she was buckled once she was able to get something out of it for herself.
This is where the story ends for now. The liver transplant was done, against the will of most of the family who paid for it and against the will of the doctors who are the experts. It is too early to tell if Dick has gotten better, but unless he changes his ways, he will go right back into the rut he started in.
It is hard to squarely put blame (unless you are a rabid partisan). The parents are the easiest target. Dick is just living as his parents raised him, but it doesn't change the fact that he is still a greedy dick. Perhaps he is getting what he deserves. The doctors can only do what the parents allow, especially since the parents don't take their advice. The family members are the one getting screwed in the end. Sure, they made some poor decisions in the past, but Dick is a manipulative bastard who took advantage of their good will. Either way, Dick is now screwed and it will be a long time until his parents let him out of the house on his own again.
Only time will tell if this bailout will work, either way this bailout has effectively put free market capitalism in the United States into a coma that is quickly inching towards, dare I say, socialism. Let me tell you another story as complicated issues like this are best explained in metaphors (and are far more entertaining).
Imagine a person, we shall call him Dick, who is your average guy (Wall Street). He has gotten used to living under his parents sheltering (regulations) rather than learn from his own experiences (free market theory). This sheltered life has allowed him to avoid all learning experiences and has become accustomed to the rules. Dick has now turned 18 and moves out on his own and no longer is forced to live by the rules of his parents (deregulation). Dick does well at first as he is a quick learner. Dick, not being constrained by his parents, is able to live large and he finds that the bigger the risk, the bigger the payout (risky market behaviors due to greed). Despite warning from his parents (Congress and the Pres), Dick becomes even more riskier and much more successful. His parents warned Dick, but they neglected to follow up on the warnings and let Dick be Dick.
Suddenly Dick collapses after a night of drinking. Despite not having many symptoms, Dick decides it is liver failure and quickly requests a liver transplant (bailout). The doctors (free market capitalists) tell Dick that this is a result of his risky behavior and has nothing to do with his liver, but with some self control, he will get through it. Dick just wants the easy way out, so he asks his parents to get involved despite his insistence over the years that they leave him alone. The doctors tell Dick and his parents that it might be tough for while he detoxes and learns from his experience, but he will become stronger in the end by simply policing himself. They say his body will recover and become much stronger because of it. His parents are powerful people who think being parental is to save their kid through bailing him out rather than let him learn on his own and god forbid his parents be seen as not acting during a crisis!
His parents decide to pay for a liver transplant (bailout) using the family trust accounts (public tax money), despite the fact that the majority of the family members (the public who are paying for the procedure) are against it because the doctors warned them of the financial impact to them simply to save this spoiled brats liver, even though they can't guarantee it will save him. The parents, in typical fashion, ignore the family members and decide to pay for the transplant.
The mother (House Reps who voted against the first bill) is against the transplant as explained to her, but is quickly convinced of its need when the father (the House and Senate leaders) decides to throw in some cosmetic improvements (bigger bill, bigger bailout), like a nose job the mother, to convince the mother to go along with it. The mother was initially against the procedure as a matter of principle, but for some reason she was buckled once she was able to get something out of it for herself.
This is where the story ends for now. The liver transplant was done, against the will of most of the family who paid for it and against the will of the doctors who are the experts. It is too early to tell if Dick has gotten better, but unless he changes his ways, he will go right back into the rut he started in.
It is hard to squarely put blame (unless you are a rabid partisan). The parents are the easiest target. Dick is just living as his parents raised him, but it doesn't change the fact that he is still a greedy dick. Perhaps he is getting what he deserves. The doctors can only do what the parents allow, especially since the parents don't take their advice. The family members are the one getting screwed in the end. Sure, they made some poor decisions in the past, but Dick is a manipulative bastard who took advantage of their good will. Either way, Dick is now screwed and it will be a long time until his parents let him out of the house on his own again.
7 Comments:
How could you not have any comments on this. This is awesom. This is awesome.
Take a look at this article, notice the date: http://tinyurl.com/3jdn9e
Great metaphor. I totally agree with this synopsis. I didn't think we needed a bailout and I am pissed off that our own Representatives sold our future generations down the river. Conservatives want to stop spending the government's money. Here was a place to put their foot down, not that they could do it with Iraq either.
The only spending I want to see is on social programs and something to help domestic issues.
How is Wall Street a worthy investment. I know it is extemely tied to the ease of credit. But maybe that is what America needs, a tightening of the reigns. College, medical and housing costs are soaring through the roof and with the rate of inflation, the average "Joe Six Pack" as Sarah Palin descibes him, cannot keep up.
Why send money down the shitter (because we know "Dick" will not learn his lesson here) when we can actually do some good with it?
"Conservatives want to stop spending the government's money. Here was a place to put their foot down"
Wait, so it's because of the republicans that the bailout passed? Let's tally those votes again. . .
"not that they could do it with Iraq either."
Did they want to? You're making is sound like conservatives abandoned their convictions by supporting the Iraq war, when the complete opposite is true. You're forgetting conservatives aren't shareholders in France's white flag factories- that's your party.
Freadom: Thanks buddy. I assume some topics are a bit more complex for someone to offer anything substantive. This is a topic I am passionate about but find that maybe I am on the losing side of this battle. Maybe I am wrong. Maybe it is time to reevaluate this stance.
Will: You can't really be pissed that our representatives sold us out. That's what they do. Only insane people expect different responses to the same actions.
McQ: Republicans (and Democrats if they truly exist) who believe in the values of free market capitalism could have prevented this bill from being passed. Then again, it is working, so what do I know, right?
@McQ - Don't get me wrong, conservatives like a good strong show of force, that is why they were for Iraq in the first place.
I am also not denying that the Dems had their fair share of their hands in the cookie jar about this bailout. The point is, it isn't going to help anyone. What I meant by that remark is that Republicans are supposed to be fiscally conservative, controlling costs and they chose not to in this instance where they could have put their foot down and finally said no. But on Wall Street there is too much money and influence for Republicans to say no.
The only reason for Iraq spending is because Republicans like their guns and like to assert force rather than influence (as the Dems prefer) in asserting our nation's presence on the world's stage. That is why they keep passing the emergency funding that is called for with Iraq.
Iraq is not an entitlement, and needs to be funded in an emergency appropriation each year. The predicament of our Congressional members, Democrats or Republicans is if they don't fund the troops at the current level, wouldn't it be the equivalent of pulling the rug out from under them politically if either party were to do it? That is why the Dems haven't fought to reduce the funding. Eventhough Congress has the power of the purse, the Dems fear the appearance it would demonstrate to underfund the current level of spending because the American people love the troops and hate the politicans that put them in harms way.
There is the difference in the two funding options between the bailout and Iraq funding. Republicans love their defense spending but choose to keep government spending to a minimum on social issues and keep the government out of it. Unfortunately, they went against their own principles and chose to "do something" rather than let the free market play itself out because a lot of their friends, who have money have influence over their re-election campaigns and this would be the equivalent to helping them acheive their next seat in Congress.
This is great. The bailout getting punished by a bunch of Ph D's in economics who have studied the markets for decades and are the world's foremost scholars on the Great Depression.
Oh, wait. That's just Bernanke, the guy who said we needed it. Never mind. Besides, the global economic countdown is all Bush's fault anyway, right?
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