“Forget Bailouts – Let the Hammer Fall” By Johnnie Byrd

Listening to the many voices offering “solutions” to the current economic crisis reminds me of some sage advice from an old friend who was diagnosed with prostrate cancer. Looking for help, he bounced from doctor to doctor, each of whom assured him they had the cure, i.e. surgery by the surgeon, radiation by the radiologist, chemotherapy by the oncologist, etc. My friend laughed it off observing that, “To a hammer, everything looks like a nail.” If my friend were alive today he’d listen to all those who have the sure cure for what ails our nation’s economy and say, again, “To a hammer, everything looks like a nail.”

To a lame duck president who is desperate to deal with “the legacy thing” his solution is doing anything to avoid the Hoover label. He is dreaming if he thinks Americans want to assuage his fear with their money.

To the Democrats in Congress who shook down Freddie and Fannie, the solution is pretending they never did. Since Obama was particularly adroit at this shakedown, his protectors in the mainstream media will turn a blind eye to it while allowing the Bush administration to twist in the wind. More government is a solution with which they can always live happily ever after.

For Republican Senator Richard Shelby (AL), who was frustrated by the Democrats in his attempts to reform Freddie and Fannie, it is payback time. His solution: let Dodd and friends twist in the wind. The only question is whether Shelby and friends are tenacious enough.

To the socialists of both parties the solution is bigger government with smarter bureaucrats packing more oversight, knowing what is best for us. After all, why were they elected to Congress if not to legislate? Fortunately, this group is adroit at reading the tea leaves and may be dissuaded by the mixed reviews the bailout plan is receiving in the polls.

To the freedom lovers, who understand that success and failure are the yin and yang of free market capitalism, the solution is to let the market work thereby allowing only the truly strong rise from the ashes of bad decisions. Let the risk takers on Wall Street reap what they’ve sown—period. In other words, the fundamentals of our economy are strong. Hint for Senator McCain: it’s the capitalist system that is fundamentally strong.

Let’s not forget the people who are running the show. To regulators like Bernanke and Paulson more regulation by smarter, more powerful bureaucrats is the answer. As recently as July 8, 2008, Chairman Ben S. Bernanke said:

I welcome recent efforts to improve the regulatory oversight of the government-sponsored enterprises, Fannie Mae and Freddie Mac. If these firms are strong, well-regulated, well-capitalized, and focused on their mission, they will be better able to serve their function of increasing access to mortgage credit, without posing undue risks to the financial system or the taxpayer.

These folks believe in bigger and bigger government—and they are wrong.

Unfortunately, most observers of the political class believe that the regulators will eventually have their way, only after much gnashing of teeth by our electeds in Congress. Why? Because as my old friend also taught me, “You can put all the courage in Washington in a thimble.” That’s why “mavericks” stand out.

Finally, most taxpayers have simply had enough of Washington “solutions” purchased with their money. Ordinary Americans are entirely skeptical when Bernanke and Paulson tell them that things will be worse without the bailout—because things are already worse. To most Americans the solution is for Congress to find the courage to put the hammer down and let our capitalist system work. If so, this will have proven to be a truly remarkable political season full of hope and change.

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