Tuesday, September 30, 2008

The Consequences of Failed Ideas

This morning a beleaguered President Bush stood before the cameras and microphones to warn of "painful and lasting" damage to the American economy. He was speaking directly about yesterday's failure of the proposed bailout package for Wall Street, but he might as well be referring to the consequences of his entire presidency, which has been on unending spending spree financed by foreign capital.

Mr Bush said at the White House: "We are in an urgent situation and the consequences will grow worse each day if we do not act."

The economy was depending on "decisive action on the part of our government", he added.

Actually, it is the "decisive action on the part of our government" that has put the U.S. into this situation. It is the reckless, unchecked spending by this administration - Iraq, the Prescription Drug Benefit, hundreds of billions in pork projects - that has sent U.S. deficits soaring and the dollar tumbling. It is the free trade ideology vigorously conducted by this administration and its predecessors that has transferred American manufacturing might to Asia, leaving the U.S. with lots of banks and fast food restaurants instead of factories. And, of course, it was this administration's refusal to reign in the banks and investment houses years ago when it became obvious to anyone with a brain that too much credit (mortgages, loans and credit card debt) was being extended to a people who couldn't possibly afford to pay it back. But, hey, the good times were rolling and why rock the boat?

Worst of all, as Steve Sailer points out in another brilliant article, it was this administration (along with its predecessor) that pushed hardest to encourage (and sometimes force) banks to give mortgages to those least likely to pay them back.

As part of this plan, George W. Bush made several speeches rallying enthusiasm for his October 15, 2002 White House Conference on Increasing Minority Homeownership. For instance, there was his classic Bushian effort on June 18, 2002:

"The goal is, everybody who wants to own a home has got a shot at doing so. The problem is we have what we call a homeownership gap in America. Three-quarters of Anglos own their homes, and yet less than 50 percent of African Americans and Hispanics own homes. … So I've set this goal for the country. We want 5.5 million more homeowners by 2010—million more minority homeowners by 2010. (Applause.) … "

The five and a half million marginal minority homeowners that Bush bunglingly called for is a big number. At a mortgage of, say, $127,000 each, that would add up to, let me check my calculator, oh…

$700 billion—the size of the current bailout. Well, whaddaya know …

The full article has to be read to be believed. This should be the greatest scandal in financial history, but few in the media will touch it directly, because, as we have all been told (in dark, intimidating tones): diversity is the greatest thing in the world, outweighing any other standard of value. It is not to be questioned.

Now the American taxpayer is being asked to bailout the administration and political class whose financial malfeasance has caused a financial panic. However, since those people have blown the last several trillion dollars given to them, it is not unreasonable to ask why they should be entrusted with even a single dollar more?


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