Monday, February 02, 2009

No Bail Out

"Insanity: doing the same thing over and over again and expecting different results." ~ Albert Einstein

U. S. Senator Claire McCaskill, Democrat, of Missouri believes she has the solution to Wall Street executives spending their share of the Federal bail-out money on Corporate jets, extravagant vacations, and million dollar bonuses.



That's right, she wants to cap their income at $400,000.00 a year, which just happens to be the same amount President Obama makes. In this way, she believes the Democrat controlled government can force these corporations to spend their free money responsibly.

How would that keep them from using the bail-out money irresponsibly? It seems to me that limiting their salaries would only encourage them to use their free money to pay themselves even bigger bonuses to make up the difference.

Who wouldn't take full advantage of free money? As I've mentioned before, would a starving man turn down a free sandwich?

The fact is, the more money they get, the more they will spend. If irresponsibility got them into their circumstances, handing them more money to spend foolishly won't get them out.

I once worked the customer service counter at a dry cleaner that was a fairly successful mom and pop operation. The cleaners did a bustling business until the owners wife got a taste of the good life. Whenever she wanted a new outfit, a new purse, new shoes, jewelry, or dinner at Ruth Criss', she simply opened the cash drawer and took out whatever amount she needed. Eventually, her extravagance drove her husband out of business.

Nobody bailed them out, nor should they have.

It is called fiscal irresponsibility, and it is this problem that Missouri's Senator means to address.

But, Ms. McCaskill is approaching the problem completely wrong. You don't give money to anyone who you know is going to waste it. That's just common sense.

In the free market system, businesses succeed and fail everyday. They succeed by making intelligent decisions and they fail by making stupid decisions.

Suppose I am behind on my house payment, utility payments, and car payment. If I receive a hefty Income tax refund, and go out and spend my refund on a big screen plasma TV instead of paying those bills, I deserve to lose my house.

Would anyone feel sorry for me? Would anyone feel obligated to send me money to help?

Also, how many of these corporations lobbied for bail out money when they didn't really need it in the first place? Something tells me if they really needed it, they wouldn't be wasting it on frivolous luxuries.

The free market system works best without outside help. It is a perfect model of the survival of the fittest. If a corporation employs sound business practices, re-invests their profits wisely, and keeps their operating costs to a minimum, they will succeed.

If they spend their profits like a drunken sailor on extravagances like corporate jets, vacations, etc, with no regard to the possible consequences, they will fail, as well they should.

If they fail because they spent their profits foolishly, they deserve to fail. They certainly don't deserve help from a government that is already suffering economic woes of it's own. Especially when much of the blame goes to the Government for contributing to such bad financial decisions.
Rest assured, if a corporation fails there will be plenty of other companies perfectly willing to step in and take up the slack. Don't let Claire McCaskill or anyone else tell you that won't happen.

No, the free market system can take care of itself. They don't need free money. The smart executives will find a way to overcome temporary financial setbacks and the foolish corporations will go bankrupt, and that's how the free market works.

Our Government needs to use our money to pay Government debts and let the corporations use their gross income to pay theirs.

That's how it was designed, and that's the best way.

The American way.

9 comments:

Trader Rick said...

We are now officially living in an insane Bizzarro World, where up is down, in is out and there is no gravity...Insanity is the new mantra, Mark.

tugboatcapn said...

Have the Democrats repealed the Law of Gravity?

I fugured they would sooner or later. (It was keepin' people DOWN!)

tugboatcapn said...

When in America did we get the right to supervise what other people do with their money?

Oh, yeah... When they stuck out their hand and accepted OUR money.

I just hope that any other businesses who might be considering asking for Bailout money from the American Taxpayers will realize the cost of that money.

Would YOU want everyone all over the Blogosphere discussing and second-guessing YOUR every expenditure?

How much would THAT be worth to you?

tugboatcapn said...

BTW...

Claire McCaskill is an idiot.

Lone Ranger said...

I think the easiest way to go would be to strip the stimulus out of this stimulus bill and pass just THAT. Here's my stimulus bill. End inheritance and capital gains taxes, cut corporate taxes in half and cut income taxes. The economy would recover in a month.

Most Rev. Gregori said...

Somebody took the phrase: Hire the handicapped, they are fun to watch" seriously when they voted all of dumbocrats into office.

Marshall Art said...

Kemo-sabe,

You speak-um too smart. Big half-white chief never go for that.

Trader Rick said...

Kemosabe's estimate of his plan's results is a bit off the mark: it would take two months at least.

steve said...

i agree with what the author of the blog says when he's talking about bail outs. it's a bad idea to give money to people who misuse it. but i'm going to sympathise a little bit here: if nothing had been done concerning our financial problems as a nation, we'd still be whining. nothing would be the perfect solution for everyone... logically, i can truthfully say that there is a chance that the bailout was the best possible outcome. (see plantinga's, "best of all possible worlds argument)

when the lone ranger said, "End inheritance and capital gains taxes, cut corporate taxes in half and cut income taxes. The economy would recover in a month." i had to laugh a little bit. i'm a university student, and to be honest, i live inside a bit of a bubble. i'm relatively comfortable, and i can approach most nitty-gritty problems at a distance if i want to. however, how would it ever be a good idea to do what the lone ranger said? i would like an answer... and if you choose to answer it, consider the poor, being a university student, i claim to be among them a lot. (ie: "i'm just a poor college student")

i like your blog, keep it up.