Happy St. Patrick’s Day!
I’m sure more than a few of us read that the Federal Reserve and JP Morgan Chase bailed out the large investment firm Bear Stearns last week. Actually, we’re the ones that bailed the bank out. Jeff Blum at OpenLeft has some darn good questions. For instance, why can’t we provide a few billion dollars to help out the borrowers? What benefit will bailing out this firm provide the rest of us?
My feelings on this are: we shouldn’t be bailing out large investment firms that knowingly took on incredibly risky investments. It’s interesting to listen to the economic elite put all the blame on the sub-prime mortgage mess on the people who signed the papers. According to the lenders, if people didn’t know what they were signing for, they shouldn’t have signed. Therefore, they deserve what happens to them. Well guess what, turnabout is fair play. If the borrowers should have known what they were getting themselves into, what responsibility should the lenders have? Apparently none.
Additionally, I find it very interesting that this move is reminiscent of activities last undertaken … in the Great Depression. But according to Bush, the economy is doing just fine! Why do Democrats constantly have to clean up Republican’t messages?
I also think it’s disgusting that these same elitists want government to stay out of their business with regard to application of regulations, but as soon as things look bleak they think it’s the government’s responsibility to bail them out. Seriously, WTF?! Does the ‘free market’ work or does it not? Really, who are the real welfare queens? Bear Stearns and the other large firms got themselves and the rest of us into this mess, more knowingly than those who borrowed from them. I have absolutely no pity for these entities who operated for years as though they were above the law. They should reap what they sowed – maybe a couple large firms’ failures would serve as a wake-up call to the remainder of them to work with regulators in the future. Bailing this firm out sends a message to all of the firms that taking on too much risk is okay since the taxpayers allow themselves to be fleeced time and time again.
I love conservative economic policies. The U.S. is no longer the world’s largest economy.
Update – Well isn’t this interesting: Bonuses handed out in 2006 at Bear Stearns totaled $2.6 BILLLION. As of today, the company is only worth 1/10 of that, down from $40B back in January. Tell me again why taxpayers got saddled with a multi-billion dollar bailout please. Oh yeah, because regulation is bad and greed is good.
Remember this when you pay your next insurance premium: we can’t afford universal health care because it’s more important to bail out Bear Stearns.
Update 2 – Granny Doc nails it.