Heading Off Disaster From Bailout After Bailout
Everyone is talking bailout options when bailout is not the answer. Bailouts waste money and fend off the inevitable bankruptcy. Capitalism rewards those who read the economy correctly with profits. Capitalism rewards those who make stupid business decisions correctly with bankruptcy. To each their just rewards. Let’s not let the economy tank because of business mistakes. There are still excellent opportunities to fix what stupid business decisions screwed up. Give the economy a boost with directed Tax Credits.
I cannot understand what the government is thinking when they address bailouts. Firstly, a capitalistic system rewards those who read the market correctly and plan accordingly. The reward is income. Secondly, capitalistic systems reward those who do not read the market correctly. It is called bankruptcy. If I, a small business owner, read the market wrong, the government doesn’t bale me out; the courts force me into bankruptcy.
Big businesses are now looking at this quarter and demand a profit. Last quarter and next quarter are not even on the radar. This short sightedness is one of the reasons for the problems we face. The other reason is Exxon and the other oil companies not satisfied with record profits. The want to push the economy to the limits to see how much the public will stand. Well, they found out how much they could push the price of gas up until we finally stop driving. Unfortunately, in testing the market, they shut down then entire US economy and then shut down the world economies. I hope they are happy now with their 13B and 15B record profits for the 2nd and 3rd quarters of 2008. Not only will they pay for that idiotic trick now but for several months or possibly years to come.
Now that we are here, let’s solve the problem. The current economy is spiraling down with only a theoretical bottom in sight. One sure way to keep this downward trend is to bail out companies large or small. Giving way money just perpetuates the current trend. It is a stop gap destine to keep the status quo. Take unemployment insurance. The government gives this to keep people afloat not improve their situation. The bailout is the same concept when applied to businesses. It keeps things afloat. What is really needed and required is to get the economy going again. What makes the economy go? The movement of goods, inventory, and services. What puts people to work? The movement of inventory. It takes people to move inventory whether sales people to sell or manufacturing staff to build goods. Giving money to bail out only perpetuates the situation and insures that the inventory will not be created, inventory will not be shipped to stores, inventory will just stay put in the warehouses. What a waste of time and effort.
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