It’s NOT The Economy Stupid, It’s The Stupid Economy

By now, we all know that Congress failed to pass the $700 billion bail-out package on Monday. I’m glad. It does not imply that I don’t care about pain and suffering of the average American. I have learned that opposing any plan that President Bush says is absolutely urgent with dire consequences requires much needed time out and contemplation.

I reject Republicans’ whining that Nancy Pelosi’s speech, just prior to the vote, condemning Bush’s policies is the culprit for the failed bail-out. Karl Rove, on O’Reilly’s show on Monday night, said that the Republicans had no choice. Many in Pelosi’s leadership team voted against the bill, which prompted minority Republicans to also vote it down. Oh, please stop insulting my intelligence by presenting Republican lawmakers as a bunch of weak pansy pushovers that blindly follow Democrats’ commands to sit and stay. I’m not buying this ‘Pelosi Republicans’ non-sense. Subsequent to Pelosi’s speech, 60% of Democrats voted for the bill and 60% of Republicans voted against it. How could Pelosi’s speech have had such a spellbinding power over Republican lawmakers. Did she hypnotize them? Did she slip a Mickey in their drinks? If Pelosi can exert so much power over Republicans, Democrats better seize the opportunity and bottle this intoxicatingly potent and yet masterfully cloaked power. Gosh, I sure hope Democrats use it for good and not evil!

This is a bad bill by conservative standards. In what way is it acceptable to believe in conservative values which rely on self-regulating forces of free market, but expect to step in when things go south? If it’s OK for oil companies to make unprecedented profits despite the chocking effect on the American economy and consumers, it should also be acceptable to let market forces choke the banking system. If conservatism thrives on less-to-no regulation, then government involvement should not be an option for Republicans to pursue. Benefit and risk are the Yin and Yang of free market forces. Corporations should be free to benefit from fruitful risk-taking decisions. At the same time, they should swallow hard and suffer consequences of failure.

This is a bad bill by liberal standards. For a group with an ideology that epitomizes big bad corporations as red-hooded wolves who feast on poor old weak grandmas, this is a heck of a departure toward capitalism. Why would you want to force tax-payers to pay for mistakes of corporations? Where’s your compassion for people?

The economy and market forces are always partially at the mercy of natural harmonics. Everything is susceptible to movements of up and down, left and right, right and wrong, feast and famine, war and peace. You get the picture. Prosperity and recession are not immune from this natural experience. We’ve had prosperity for a while, and now it’s time for recession (maybe).

Alternative solutions from both Republicans and Democrats are ill-advised. Republicans introduced the idea of completely eliminating capital gains tax into the bail-out plan. That’s just stupid. The solution to a failed policy of reduced regulation is not to pile on more of the same. And this is not the right time for it. Democrats introduced more regulation such as a stock-transaction charge. This is equally as ridiculous.

Let the markets’ natural forces take their course. Quick, unprecedented and expensive fixes may temporarily sway the economy in a desired direction, but its effect will be short lived. The full force of its bounce back as a result of our feeble and misdirected impulse will be disastrously more painful and prolonged. We have a choice. We can mess with natural market forces, enjoy a short-lived period of prosperity, and soon suffer its consequences. Or we can face the music now, suffer a short-lived painful period of stagnation, but enjoy a quicker recovery out of this miserable mess.

I predict we will take the first approach. We are Americans. We want less pain, more prosperity, quick fixes, and we don’t want to pay for any of it. Well, guess what? That attitude has now caught up with us. Are we sufficiently intelligent to recognize it?