Posted by: mattcolvin | September 24, 2008


CNN quoted Barack Obama about the economic crisis:

Obama said it’s unacceptable to expect the American people to “hand this administration or any administration a $700 billion check with no conditions and no oversight when a lack of oversight in Washington and on Wall Street is exactly what got us into this mess.”

He said struggling homeowners must be taken care of in any economic recovery plan — and that taxpayers should “not be spending one dime to reward the same Wall Street CEOs whose greed and irresponsibility got us into this mess.”

This sort of class warfare marks Obama as a demagogue. Why are Wall Street CEO’s “greedy and irresponsible”, but overreaching homeowners who signed themselves into a hole of debt for more home than they could afford — these people are not greedy? These people need to be “taken care of”?

Does no one see that the greed of Wall Street would have nothing to work with were it not for the greed of American consumers?

And the solution?

Read Bastiat, people. Anytime a loan is given to undeserving Tom, it means that it is being taken away from someone else who does deserve it. If Dick loans his money on Tom, he is taking a risk, in the hope of gaining interest. If Tom defaults, and Dick loses the money, it is wicked for Dick to try to use the law as an instrument of plunder to force Harry to pay him the money he has lost by making a foolish loan to the credit-unworthy Tom.

Am I missing something, or is that not precisely what Bernanke wants the government to do, on a massive scale? Taxpayers will pay the money that banks have lost via foolish loans.

Near as I can tell, fiat money is a Ponzi scheme.



  1. Because most of these probably thought their bank had a vested interest in not making a bad loan. They were told that the loan was reasonable.

    I don’t think that is sufficient justification at all. No one should be bailed out by the inflationary/taxing machine.

    I’m just saying that people who should have known better misled others into it. We shouldn’t pretend populism is true. Leaders set up a system that gave people false signals about what they could afford. Maybe they all should have known better, but I think the guilt does primarily lie with those who are assured a bailout. The greed of Wall Street was to make false promises; the greed of consumers was to believe them.

    I guess I’m surprised at your dismissal of class warfare. Because that is certainly what is happening: the rich are going to further plunder the poor via Paulson and Bernanke and McCain and Obama and Bush.

    And amen to Bastiat! I repeat, I don’t want a bailout. I just don’t think the blame lands equally which is what it sounds to me like you are saying.

    I hope I did not misunderstand you.

  2. I agree with you, Mark. The blame is greater on the makers of the false promises. But I want to note that that designation includes the defaulting homeowners. They made promises too, and broke them.

    That said, the predatory usury in this country is a greater evil than coveting a house one can’t afford. So the lenders are guiltier.

    That the Champions of Free Market Economics (i.e., the Republicans) are screaming for a bail-out underlines the depths of their hypocrisy. That the Bleeding Heart Liberal Socialists (i.e., the Democrats) are asking that any rescue include poor Joe Public, and that the Wall Street Fat Cats should take more of the blame, is entirely in keeping with their tradition. So what’s the surprise here?

    For some reason this brings to mind something else I’ve occasionally thought about.

    Here is a situation with which we are (figuratively, at least) confronted regularly. I encounter some other being who appears to be down and out (in one sense or another) and is requesting help. (Spare Change?) Sincere? Or simply a con artist looking for money to feed his habit? I don’t know. I can respond in a couple of ways, and in each case I may be incorrect in my judgment.

    Lets say I fork out some spare change, and it turns out that this really was just a con artist looking for easy money. Well then, I suppose I’m a gullible (if compassionate) fool and I’ve lost some small amount of my material wealth.

    Alternately, lets say I avoid I contact, clinch my money tighter, and walk on by. It turns out this person, through no fault of his own, really did need my help. In this case I suppose I’m a heartless bastard and I’ve lost part of my soul.

    Better misplaced compassion than no compassion at all? Of course, if you Know you’re Never Wrong in your judgments of others, then this problem is not one with which you ever struggle.

    (Likewise it’s a non-issue if you’re already a confirmed gullible fool or heartless bastard.)

  4. The Republican Party has not been pro-free-market for some time. So I agree with you that the Republicans are hypocrites because they have betrayed their principles. But the Democrats have written hypocrisy into their platform: they want to plunder taxpayers and call it generosity.

    There can be no moral comparison between the government’s use of tax money for wealth redistribution and private charitable giving out of a man’s own pocket. This is true whether we talk about redistributing wealth to the poor (social programs, foreclosure relief), as the Democrats claim to want to do, or to the rich (corporate bailouts, lucrative military-industrial adventures overseas), as the Republicans have so often done. And of course, both end up redistributing the wealth to government bureaucrats who administer the “charitable” programs.

    If the Democrats were to exhort and plead with the rich of America to help the poor by charitable giving, I would join my voices with theirs. Their cause would be honorable, honest, and worthy of all support. But that is not what they do. They use the law as an instrument of plunder. See Bastiat’s chapter on this topic in The Law.

    Your analysis of the course to pursue in one’s own charitable giving is quite correct. And it coincides with the teaching of Jesus: “Give to him who asks of you, and from him who wants to borrow from you, do not turn away.”

    Have you read Davy Crockett’s speech “Not Yours To Give”? It’s here.

  5. FYI:

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