Tuesday, September 30, 2008

Commentary: Bankruptcy, not bailout, is the right answer - CNN.com

I think I'm beginning to feel like the economist, who wrote the following:

Commentary: Bankruptcy, not bailout, is the right answer - CNN.com

Government-chartered institutions like Fannie Mae and Freddie Mac are part of the problem. Why now should government bail others out?

And what happened to market economics? If a small businessman gets in over his head, no one bails him out. Maybe some of these big finance companies should go bankrupt.

Let me be clear, I don't want people to lose their homes or jobs. That stinks.

But for companies that took risks, what's the risk if the government bails them out? Maybe they should have to look at bankruptcy.

From the article:
Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

Instead, it looks like taxpayers will be punished.

Finally from the article:
The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

1 comment:

Ben said...

I preface this link with saying that I am not "one of those" Ron Paul cult guys. I like some of what he has to say. I also like a lot of what other people have to say about "things" and "stuff."