January 3, 2009
People are scared and frustrated. And no-one wants to step forward and be the face of the greedy capitalist. So bloggers, the MSM and Barney Frank all fling mud at the banks, Paulson, Rubin, etc. Some of it is definitely justified, to be sure, but a lot is just opportunistic and counterproductive. For example:
- Demanding banks show how they are spending their bailout dollars is silly. The whole point is to give money to all in order to hide the weak ones temporarily (evening out confidence throughout the system). If we uncover the ones in trouble we’re back to square one. I’m not arguing this is the best medicine, but at this point the patient is in treatment, let’s give it a chance to work!
- Forcing them to use the money to lend out, or some other specific purpose would amount to centralized control, in other words communism. So we threw them a lifeline. Now let them figure out what to do with the money as only they can.
Just because they made a huge mistake (which by the way we ALL committed), we cannot pretend all of a sudden we know how to run their business better than they do.
Expecting banks to act for the common good is anathema to capitalism. Any program to fix housing that does involve banks should be based on incentives that make it financially desirable for them to participate.