OPINION: Let’s recognize what this bailout means

Meanwhile, our manufacturers took the big boat to Peking. That great housing bubble turned out to be a leaking pair of rubber swimmies that left us sinking in deep waters.

We now face sobering truths.

We worry about a Great Depression.

And our president has proposed a $500-700 billion bailout of failing financial institutions, a desperate attempt to pull our country off the edge of the fiscal cliff.

To put the bailout in perspective, the Iraq War has cost $581 billion so far, according to the Congressional Research Service. The bailout will likely exceed that.

Can we afford to fund another war?

Can we afford not to float this financial life raft?

This bailout is on the table because people failed to recognize risk and acted as if nobody would ever have to pick up the tab on their excesses.

But the taxpayers will ultimately have to foot the bill. A bailout is easier to hear than “tax increase,” but that’s exactly what it is. And how exactly are we going to cover this cost in the immediate sense, borrow from other countries?

I am very ticked.

In approving such a massive bailout, we’re adding on to our national debt, which currently stands at $9.7 trillion, or roughly $31,000 a person or about $124,000 for a family of four. You got that kind of money floating around? I sure don’t.

The “tax and spend liberal” has long been maligned as the source of economic woes in this country. But the “borrow and spend” Republican policy of the past eight years has been much more damaging. At least a “tax and spend” policy is a pay-as-you-go effort, while the “borrow and spend” plan is akin to putting the bill on a credit card and letting someone else deal with the ugly hangover.

We heard over and over again about tax cuts for the wealthiest Americans in recent years, but many of us have seen no tax relief at all — save the little stimulus check — and have watched as health insurance costs cut more and more dramatically into our take-home pay. The trickle down theory has worked out splendidly for the wealthiest, while many middle class folks feel like they’re just getting flushed on.

Meanwhile, we’ve seen a true laissez-faire, hands-off attitude in recent years under Republican rule. The GOP has long preached “deregulation” as the key to economic salvation for America. The invisible hand of the market will cure all. While “deregulation” has a great ring, the blind acceptance of a one-word religion represents an unbalanced, overly simplistic and truly reckless approach to complicated economic matters.

No, I don’t want to see penalty flags fly every play in a football game, with referees impeding the free flow of the action. But I know, too, that if you eliminate the rules and the referees, you invite chaos and cheating. You hurt the integrity of the game.

In any sport, we need a basic structure, a fair playing field. We need rules, but they must be applied reasonably. This is certainly a difficult balance to maintain. We recognize certain games as being over-officiated and others as horribly lacking in any enforcement of the rules.

Likewise, the government has a role in the markets in setting rules and establishing fair playing fields. If the government establishes too many regulations, then it resembles the over-zealous referee who won’t let the kids just play the game. But if you swing too far the other way, and eliminate too many rules and referees, then you open the door for a culture of cheating and gaming the system.

And, in a competitive market, if one person gets a leg up by taking a questionable path, then his competitors are going to take notice. They’re going to face considerable pressure to do the same just to keep up.

This has happened on a massive scale in America.

Of course, I’ve heard one argument that Bill Clinton is at fault for the housing mess for pushing for more home ownership by minorities. Do those who say this forget that it was Bush who announced grand plans for an “ownership society?”

Here is a direct quote from 2004 off the White House website:

“President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities,” stated the White House Fact Sheet on ‘America’s Ownership Society: Expanding Opportunities.’ “The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade.”

Bush’s “ownership” plan may have been drafted with good intentions, but it could certainly be argued that encouraging the real estate and mortage industries to dramatically boost home ownership was a real factor in the subprime mess.

Now we may be forced to accept Bush’s extreme measure to avoid economic doom.

Many Republicans are truly angered by any handout on the poor end of the economic spectrum. They note the lack of personal responsibility by so many poor folks.

But now that we’re on the verge of a welfare system for the finance industry that costs more than the Iraq War, will they show equal outrage? Or, will they embrace a blatant hypocrisy? Will they hang on to a reckless Republican fiscal ideology that has utterly failed the nation?

They say they'll guard against this, but do you feel confident that corporations who receive massive government welfare checks won't have exorbitant CEO salaries on the taxpayer dime? I don't.

There ought to be major reform along with this handout. And this decision shouldn’t be rushed because we’re in a panic. This is a truly complex deal. And correct me if I’m wrong, but is this not one the greatest acts of socialism — if not the greatest — in our nation’s history? And it comes at the request of a free market fundamentalist president. Wow.

We need to take a deep breath and read the fine print before we put our names on this doozy of a check.

Well, this just in: looks like the John Hancock’s about to be applied.

Zach Mitcham is editor of The Madison County Journal.