Americans are steamed about the bailout proposal.
The Rocky Mountain News quotes Mark Udall on the constituent reply:
“People are mad,” Udall said. “My calls are mixed, between people who say ‘No’ and people who say ‘Hell no.’ “
A colleague here at the Hoover Institution spoke recently with a senior, and Democratic, member of the California congressional delegation. In the last week, she said, her office had received roughly 15,000 telephone calls, letters, and emails. How many favored the bailout?
So, in reply, “Leaders seek new deal,” quotes a headline at the top of The Denver Post’s web page. The Rocky Mountain News online leads with a story about how Obama and McCain are joining Bush to “save” the bailout package. The level of media cheerleading for the bailout has been extraordinary.
Meanwhile, Bloomberg reports, “The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.” As economists in the Austrian tradition like to emphasize, a fractional reserve system that can be manipulated by a central agency is prone to bubbles and deflationary retractions.
John Lewis has the following to say about the bailout:
… I am opposed to bailing out these firms. But what I am more opposed to is the entire political culture of regulation–including manipulation of interest rates, Sarbanes-Oxley, changes in accounting rules, the Community Renewal Act, and a scad of others–that has fostered this mess. Two weeks ago no politician in Washington knew this was coming. Suddenly, after several all-nighters, they have enough knowledge to grant a quarter of a trillion dollars to a government bureaucrat, to dole out as he sees fit–and to promise another half-trillion, should his actions make it worse.
Meanwhile, the country focuses on the allegedly evil CEOs, “speculators” (read “investors”), and loan initiators who were earlier damned for NOT making loan money available to high-risk borrowers. I remind you that the Community Renewal Act penalizes firms for not making such risky loans. Now, suddenly, those firms are villified for following the law. …
The government is not saving Main Street–it is nationalizing it. Is it not true that, with the takeover of Fannie Mae and Freddie Mac, the government now holds paper on tens of millions of American mortgages? What does granting American citizens “equity positions” and “profits” in companies seized by the government mean, except communism? Don’t we condemn Hugo Chavez for nationalizing oil companies? …
Interesting times, indeed.