Like you, I have been alarmed by what is happening in Washington and on Wall Street.
I have spent many hours over the past few weeks trying to understand the causes of the financial crisis that the world is facing today.
I’ve purchased 4 books on the subject, researched extensively in the Congression Record from 1994 on, studied what Warren Buffett and Charlie Munger his partner have been saying about derivatives for years, and more. I am trying to understand root causes and possible solutions. And I have come to the firm conclusion that the proposed bailout will cause even more problems than it is trying to solve, and that it would be the biggest step towards socialism this country has ever taken (and we have taken lots and lots of little steps.)
Today, Time Magazine published the best piece I have seen so far in the main stream media about why the bailout should not have happened. I recommend that you take time to read it: http://www.time.com/time/business/article/0,8599,1845209,00.html?cnn=yes
Also, if you happen to be interested in some of the tidbits I’ve uncovered about what is wrong with unregulated OTC derivatives, read my comments on Digg.com about the Time Magazine article: http://digg.com/business_finance/Bail_out_people_NOT_banks
Yesterday I read 20 pages from the biography of former secretary of Agriculture Ezra Taft Benson, who was harshly and repeatedly attacked during the Eisenhower years for NOT bailing out this country’s farmers, even when there was serious pressure to do so. But he stood firm on principle, and opposed popular political solutions like price supports and other government programs, because in the end, they never work. They create more problems than good.
When Secretary Benson was assigned by Eisenhower to accompany Soviet leader Nikita Krushchev on his visit to Washington (a visit which Benson opposed), he took him to a USDA experimental station in Maryland and gave some opening remarks: “Our farmers are free, efficient, creative and hard working…. Under our capitalistic free enterprise system they have developed an agriculture unequaled anywhere in the world.”
On the trip, Krushchev reportedly boasted to the Secretary, “Your grandchildren will live under communism.” “On the contrary,” Secretary Benson replied, “my grandchildren will live in freedom as I hope that all people will.” The Soviet leader responded, “Americans are so gullible. They are in the process of being fed small bits of socialism and one day will awaken to find themselves living under a totalitarian order.”
– Ezra Taft Benson, A Biography, pg. 339
It’s hard to find principled government leaders these days, who are true statesmen. I’m finding a few, but they are rare, and not always in leadership positions.