Sunday, September 28, 2008

Calling J.P. Morgan

Calling J.P. Morgan. I have refrained from commenting too much on the proposed/pending governmental bail-out, because either way it goes, things are going to be rough. I would point out that it was Woodrow Wilson, fearful of the power of magnates such as Morgan, who brought the Federal Reserve System into being as a way of reducing the influence of private actors. Ironically, increasing numbers of economic historians are pointing to the Fed as making the problem worse instead of better, particularly in regard to the Great Depression.

Still, I want everyone to repeat after me:
1. The FDIC is stable and secure, as is the FSLIC.
2. There is no need to hide money under the mattress.
3. Pulling money out of the bank will only make things worse if everyone does it.
4. This problem only exists because stupid banks made stupid loans to stupid people.
5. The government did not help anyone by encouraging banks to make aforesaid stupid choices.
6. The government will only be encouraging this sort of behavior in the future by bailing out the stupid banks.
7. The government is full of stupid people of both major parties, so putting them in charge could would make things even worse.
8. There is no such thing as a free lunch.

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