Friday, March 20, 2009

GOV is the real threat, not AGI.

Over the last few weeks the outrage over the bonuses for the AIG executives have hit fervor heights. As I've listen to the phony baloney outrage that the congress and the President have over these bonuses, one better take a look at the facts that have lead to this chain of events before their emotions totally take control and people do something rash. Enthusiasm without wisdom is wasted.

First of all, Chris Dobbs had put the bonuses into the stimulus bill to begin with. Now we're suppose to believe Geitner and company didn't know about it. Pleeeeeeeeeease! This bonus was deliberately put into the bill. Then, BO, the man that was going to look over every spending bill line by line and veto all the earmarks and pork, signed it with blind faith. The government knew about it because they put it in there. It was only after they got caught with their dirty hands in the cookie jar did they feign outrage. Now to cover their own butts, they write up an unconstitutional bill to tax all the money back. Talk about the height of abuse of power and arrogance.

First of all, I'm sick and outraged that these men are going to get these grossly overpaid bonuses as much as anyone. With so many of us not being able to get work because of the greed and stupidity of many of them. However, many of these bonuses were earned before this debacle began and are part of the contractual agreement made by the company and the employees. So like it or not, they're entitled to those bonuses. Now because the situation is bitter and unfair, we're going to negate these contracts? What next? We can dissolve any contract we suddenly find inconvenience or no longer to our advantage, even though the other party fulfilled their end in good faith. That's a recipe for chaos. The same kind of chaos that got us in this mess in the first place. As much as it makes me sick, these guy should get their bonuses.

What should outrage us is the way the government is handling this farce. They created it first with the Bush and Obama bailout money. Hey, what do you expect when you hand out money like candy and with no oversight? Did you expect it to be spent wisely and responsibly? If you didn't want these guys to get the bonus there was one and only one way to kept from rewarding failure like this: LET THE BUSINESS FAIL!!!! Hello!!!! That's how the market deals with bad businesses that make bad decision. Now this government has been rewarding failure before they even got into office and now that an exgregious example has presented itself naked for all to see, we now get outraged. AT THE BUSINESS!!! It's our crappy two parties that gave us this disaster and farce and they are the ones ultimately responsible. Had they let the market forces do what they're designed to do, this wouldn't even be a news item.

So now they've used fear tactics to gain support and pass these bad policies and the people are starting to notice. When they get caught, the government does what it always does: cry foul and start to point fingers. This is part the complete incompetence that this administration has about economics and it's only been two months. Now they're pumping a trillion dollars into the economy and everyone was asleep while going ga ga over this. With the spending that BO has done in just two months, we're looking at over a trillion dollars of added debt a year and we're just starting. With this new money being pumped in, it's making me glad I don't have any savings or investment because soon we're going to have one of two things happen and neither are good.

What happens when a government pumps more money in the economy while there's no increase in production of goods and services? If you said inflation you would be correct. But wait, that's assuming there's no growth in the economy with pretty much been the case. It's actually worse because with the increase of unemployment the declining production of our manufacturing base (what's left of it anyways), production is actually down. What this lead to is stagnation. Where inflation that's usually a result of increase production and wages, is now just from printing of money while jobs and goods are becoming scarce. What can happen if this continues, and there's nothing indicating they're going to do anything to increase production, is what is known as hyperinflation. If you want an example, just look at Zimbabwe. The racist president there had all the white people either deported or killed and gave the farmland to the blacks there. The problem was the black people didn't know how to farm and those that did were killed or deported. A year later, there was no food, no new goods or services. They have inflation now that's a 1000 percent a day and rising. They have riots in the markets because a 10 minute wait can mean paying twice as much. The riots at the banks are a hoot because any delay in cashing a check can mean a great loss of purchasing power in a matter of an hour. All this because the country can't produce anything except more paper money that's more worthless by the second. Now food is so scarce, people are raiding zoos and national parks and eating the animals there. Elephants have been the biggest target because they offer the most meat.

We think it can't happen here, but we're copying all the trait that got them there in the first place with the economic policies. Hyperinflation and government corruption is a far greater threat than any bonus by an executive and we're letting it happen right under our noses. Will we wake up in time before we see our savings and wages become dust right before our eyes. Or will we just keep following the crocodile tears of our corrupt government and focus our outrage on trivial matters as how one gets paid?

QED

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