I am NOT an old fuddy-duddy.
I like new ideas and am always on the lookout for something bigger, better, or faster. But I have to admit I can’t understand why we keep trying to fix things that aren’t broken. When something is working, why can’t we just let it work?
Back in the “good old days”, a typical family would at some point want to participate in the American Dream. Mom and Dad would build their savings at a local bank or “savings and loan” for a few years until they could afford a down payment on a home. Then they would go to the bank and apply for a mortgage.
The bank would judge whether this family was a good “risk”. After all, they wanted to protect the assets of the bank’s owners and other depositors. When a family put down a significant amount of its own money, usually 20%, they could be counted on to make the payments to protect their own assets.
This simple little arrangement worked beautifully. It was a system of checks and balances – free market capitalism at its finest. Americans were encouraged to work and save, and were rewarded for that good behavior. Banks were stable, secure, and well, boring. New home construction and the manufacture of home products ensured full employment and drove our GDP to make our nation prosperous and strong. Real capital multiplied and our standard of living improved predictably, year after year. And it was eminently fair.
But then somebody decided maybe it is not so equitable for one family to own a home when another did not.
And look at us now. The government holds or guarantees over half of all home mortgages, and a good portion of those loans exceed the value of the homes or are in default. The taxpayers bailed out the banks, allowing them to maintain their exhorbitant executive salaries and bonuses while the bank tellers are on public assistance. Banks no longer make their living by holding savings (for which they paid interest) and loaning that money (for which they charged interest). They now bathe in profits by holding cash balances generated by the Federal Reserve, which buys government bonds with artificial cash. Those profits are invested in the same mortgage derivatives that caused the banking crash and bailouts in the first place. Savers get zero interest from the banks while the purchasing power of their dollars continues to dwindle. Unemployment is epidemic as government benefits now exceed entry-level wages. And the standard of living for everyone (except the bankers and those connected to the government) continues to tumble. What a disaster – all caused by the government messing up the banking business in the name of “equality”.
Now we are told that it is unfair for some to have health insurance while others don’t – a federal takeover of the medical care delivery system is required. And we are told it is unfair that some earn less money than others, so federal laws must force employers to increase their payroll expense.
When will we admit that government can not force equal outcomes for any sustained period? Every time the government tries to bend and shape the time-tested rules of the free market, the result is butt-ugly. I know it. You know it. Everybody knows it.
Kind of makes you question their motives, doesn’t it?
Tom Balek – Rockin’ On the Right Side
Bend me, shape me
Anyway you want me,
Long as you love me, it’s all right
Bend me, shape me
Anyway you want me,
You got the power to turn on the light.
Rockin' On The Right Side 