The Havoc Our Government Wreaks

Posted May 4th, 2009 at 2.47pm in Enterprise and Free Markets.

Commenting on the White House’s Chicago-style negotiations with Chrysler’s creditors, The Atlantic’s Megan McArdle writes:

[W]hen did it become the government’s job to intervene in the bankruptcy process to move junior creditors who belong to favored political constituencies to the front of the line? … these people lent money under a given set of rules, and now the government wants to intervene in our extremely well-functioning (and generous) bankruptcy regime solely in order to save a favored Democratic interest group.

Later live-blogging the Berkshire Hathaway shareholder meeting, McArdle reports:

But this whole line of question highlights something for me: regulatory risk is a gigantic concern this year. Every third question seems to be about some major government project, and what sort of havoc it might wreak on his business.

Last night, I went to dinner with some investors, where a long conversation about the difference between investment and gambling ensued. Warren Buffett followers aim to invest, not gamble. But when the government is involved, it’s all gambling–none of the people I’ve spoken to, and (I’d wager) virtually none of the people in the arena, have any particular insight into the workings of the government processes. Hell, these days, the people I speak to at Treasury and the Fed don’t seem all that certain about what they’re going to do next.

An investment in Goldman Sachs and Wells Fargo is a bet that, first, the world economy won’t really collapse, and second, the government won’t get mad and take your money. There’s no reason to believe that Warren Buffett, or anyone else, has any good way to assess the probability of those beliefs.

Since Novemeber of last we’ve been saying that with TARP at its disposal, our government has become perhaps the single most disruptive force in the global economy. It is way past time to end the TARP.

Author: Conn Carroll
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7 Comments

May 4, 2009 ASH, Toledo ,OH writes:

How come the market is responding positively to as the new policy unfolds. It (market) should be in the TANK. Is the market wrong or are our persecptions about the policy is so conservative that it is outdated and not valid any more.

May 5, 2009 RIW, Raleigh writes:

Because people are enamored of mass movements. The Market is running on its own momentum right now. Expect it to die again before the end of the year, as the T-Bill rate stacks up, the price of energy rises, and the uncertainty causes yet more failures and problems.

May 5, 2009 TJS, Leesburg, FL writes:

The TARP program is a lure for criminal activity. Obama’s armtwisting of bondholders is pure corruption of power.

Will Republicans consider criminalizing armtwisting when they regain power, the way Obama has toyed with criminalizing Bush’s methods of interrogating terrorists?

May 5, 2009 TEN, Libertyville, IL writes:

The reason the economy is not quite in the tank is partially becuase the government gave banks stimulus money. That’s like giving a lumber yard free lumber to sell to customers, and the housing market (which depends on loans) is one of main problems with the economy. Even with this help, the economy is still terrible, and not many people see it getting back to pre-2007 levels soon. The government has done more harm than good by especially sticking its hand into GM’s and Chrysler’s business. Let’s not even mention Freddie and Fannie.

May 5, 2009 dr_donn writes:

The current administration is unquestionably hurting our economy, soon, some of our foreign friend will feel the effects of the Obama policies dragging down thier economy. When that happens, all hell is going to break loose.

May 6, 2009 Marshall Hill MI. writes:

Freedom is Not Free!

May 6, 2009 JWThinkwright writes:

Clean out all incumbents in 2010

The financial crisis of September 2008 was probably contrived, and probably included some inside help from within our own Treasury Department. Whether or not these suppositions are true, we do know: 1. Auto industry stock prices have tanked; 2. The UAW has assumed ownership of Chrysler. This is Banana Republic stuff: The government causes a crisis, and causes the transfer of capital at distressed prices to political buddies. It is theft, and any politician who participated in the any part of these shenanigans, or even has supported, in any way, the transfer of ownership as described above, must be removed from office. Since all Congress (House and Senate) was complicit, a clean sweep is in order for 2010, 2012, and until every last scoundrel is removed from office.

After years of demonizing “Corporations,” we have lost sight of the identity of who are the owners of corporations. The owners are retirees, either through direct investment, or through portfolios in retirement accounts. Other owners are institutions, such as hospitals, museums, banks, credit unions, churches, charities, and pension funds. In all cases, the original investment was made so that the investment would be safe, would be a hedge against loss of value via inflation, and would be available when needed. In all cases, the origin of the funds was wages paid for legal pursuits. From childhood, we have all been encouraged to put aside a portion of earnings for emergency use, or for when we are too old to work.

Not only are our savings being handed to friends of our masters, but throughout our lives, a portion of our labor has been confiscated via taxes. What with income taxes, Social Security taxes, property taxes, taxes on fuels, surtaxes on telephone, electricity, business licences, fees and sales taxes, I remit to some government functionaries (my masters) more than half of what I earn.

I was outraged when I read in Frederick Douglass’ autobiography that when he returned from a hard day of caulking ships, he had to empty his pockets, and turn over all his pay to his master (on a few occasions, he was searched, i.e, audited). I am just as outraged about handing my money over to a bunch leeches in Washington, Los Angeles, and Sacramento.

Mr. Douglass: I hear you. I too am indignant about having to empty my pockets for my master, so he may live the good life, feed his ego and his belly from my pocket, while saying he is watching over me. That is what the tea parties are about: The theft of my labor by GOVERNMENT.

The Tea Party Phenomenon.

Current Tea Parties were to send the message to Federal, State, and local governments: LEAVE US ALONE. GET OUT OF OUR LIVES.

We cannot communicate with our masters any other way. Elections are meaningless: the candidates are nominated fraudulently, the votes are not counted honestly, the voters aren’t citizens. Elections are shams.

The Tea Party is our voice. It’s our last resort. How else can we express ourselves?

Hey guys and girls: The one on April 15 was practice, Let’s go again on July 4th. It’s OUR freedom and the fruit of our labor we’re talking about. Remember Rick Santelli. Remember Lech Walesa, while you’re at it. Remember Frederick Douglass! AND, need I even mention it? THINK ABOUT YOUR CHILDREN, and THEIR CHILDREN.

I know the sign I tote will read: SWEEP OUT CONGRESS,
They are THIEVES.

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