Posted by: mattcolvin | September 30, 2008


Here is CNN pretending to inform, but actually attempting to change your opinion. Our handlers in the media know that the $700 Plunder bill is incredibly unpopular among Americans. (One poll had it at 70% against it, 7% for it, the rest undecided.)

Given this strong unpopularity of the bailout, it is reasonable to surmise that the reason why 11 Democrats broke ranks to vote against it on Monday is nothing other than good, healthy, fear for their jobs: their constituents flooded their offices with messages registering their disapproval of the bill, and these Democrats (and many Republicans) suddenly gained the backbone to resist even the persuasions of Nancy Pelosi.

That is why CNN feels it has to go to the people with a list of reasons why the bailout must be passed. If it is not, they say, we can expect three things:

1) It will be harder to keep your job.
2) It will be harder to get loans.
3) It will be harder to sell your home.

In other words, the market has realized that American credit and wages have been artificially pumped up by bad regulations and government interference in the economy, and the only way to prevent this reality from coming home to roost immediately is… for the government to engage in more monkeying with the economy, and pump even more inflationary funds into the system to maintain liquidity. In other words, to do more of what it already has done.

But this cannot work. It only postpones the inevitable. Credit is fungible, and to assign it to those who do not deserve it is to misallocate resources. The market will not allow resource misallocation to continue without punishment by the Invisible Hand. You know, the one that once wrote “Mene, Mene, Tekel, Parsin”? We are already due for a major economic spanking. Why make it worse by continuing to sin in the same ways?

Write your congressman and warn them that if they change their minds tomorrow (Wednesday) and vote for the bailout, you will vote them out of office.

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