Both political parties are rushing to bail-out the losers in the present economic crisis.
- Bail out my friends who insured the Big Shitpile, begs Jim Cramer.
- Bail out the rich, says George W. Bush.
- Bail out the poor, say the Democrats.
Unfortunately there’s a sort of rough justice which takes place during these market crashes. I have seen it during every single crash I’ve ever covered, from the oil crash of 1981 through the dot-bomb of 2001 through today.
We don’t want idiots bailed-out. Those of us with cash, or those who stayed on the sidelines, want the chance to pick through the wreckage at our leisure. Analysts claim there are two emotions, fear and greed, which determine where prices will go. There’s really only greed and greed.
During a boom everyone wants to be venture capitalists.
During a bust everyone wants to be vulture capitalists.
Fact is most of us want to see fools’ bones picked clean before
we move on, and it’s amazing how politicians (as well as those who
cover them) never figure this out.
They brand it our inner Mr. Potter coming
out. I share that feeling. Lovers of the film It’s a Wonderful Life
will note that Mr. Potter grew to respect George Bailey after he
managed to save his broken-down building and loan. Those who keep their
heads are judged moral by the market. Those who don’t deserve what they
get.
I don’t remember anyone wanting to bail-out Chinese investors a decade
ago, and I distinctly recall laughing in the face of some
late-to-the-party entrepreneur after the dot-bomb bubble was popped.
Comedy is when you fall on your face, while tragedy is when I get a
hangnail.
The bottom line here is the bottom line. Americans were stupid to trust this Administration, to trust these bankers, to ignore the need to regulate in favor of ideology, and we’re going to all take it in the shorts. That process of taking it is going to take time, and there’s no magic pony plan to prevent it.
What’s important at this point is to learn the lesson. Don’t believe any ideology, whether of the left or the right. Verify everything before you invest money or trust in anyone. And when you’re robbed find the culprit, then make sure they wind up in jail, broken.
Easy to say. Tough to suffer through. Because the cause of this financial panic is looking at you this morning in the mirror. You allowed this Bush Junta untrammeled power, whether or not you voted for them. You allowed these bubbles to develop and did nothing while times were good.
Once we see where we are, once we see the world’s new financial balance, then we can start building our way out. The Democrats talked yesterday of "green collar" jobs. If that means getting serious about a War Against Oil, amen to that.
But you can’t have a short-term fix to a long-term problem, and housing is a long-term asset. Deficits are a long-term liability.
Gee, my inner Mr. Potter feels better.
