Vicious Rants of an Angry Yellow Man

The news that Bear Stearns needs bail out and may be bought out is not all that shocking. There will probably be more companies that will go under over the next year. Tax payers will be saddled with more debt as a result of the risks that these companies took. This points out that we are not in a true capitalist system where you are rewarded for your victories but punished for your defeats. The punishment for the Bear-Stearns executives for sinking the ship? No bonuses! They should be fined for the outcome since they were richly rewarded when the market was doing well. When companies get so big they can take risks that people in retrospect would condemn. But since the government doesn't want the economy to go into a depression, they will always bail big companies out. If you know that someone will always give you money if you fail but you can keep everything your investment brings in, wouldn't you go for the investments with the biggest reward and don't care about the risks? This is like the Chinese banks which loan money as fast they can to help the economy grow without worrying about defaults because they believe that the Chinese government will always bail them out. This is the communist system and yet we are doing pretty much the same thing. In fact it is worse in some respects because wall street executives will not go to jail for making dumb investments, only if they committed fraud. With the Chinese executives they would lose more than bonus money if they failed. So perhaps the Chinese executive would be more careful about risks than his American counterpart.

Ultimately unless we can figure out how to not accumulate debt, all the bailouts in the world will not save our economy. From individuals who have more debts than savings to our government which is running record deficits, we all have to do our part. I don't agree with candidates when they say that trade agreements hurt our economy. Just because the products are cheap it does not mean we have to buy them. We all should live within our means. The conservatives are right about personal responsibility when it comes to one's finances. Yet Bush's idea of helping the economy is to make the tax cuts permanent. I like lower taxes as much as anyone else but I don't see the logic that prosecuting a war that is costing us billions and creating a greater deficit everyday is a good idea. At best all this is going to be passed on to our children. At worst it is a national security risks. China and other countries are controlling our treasury bills. The dollar is sinking fast in value. If a company like Bear Stearns is up for sale, who do you think may bid for it? It will either be another investment bank with the help of the government (nobody would or could do it on their own since everybody is losing money right now) or it will be an Arab country or China. How is that for national security risk?