Comments on: Rewarding incompetence? Well, who is John Galt.

By: CA

CA — Sat, 11 Apr 2009 13:23:37 +0000

If the US were truly a free economy, large insolvent businesses would have filed for bankruptcy a long time ago. It’s only the SMEs who are not getting any bail out.

Look at the forest industry - they are not getting any money. The inefficient mills are shutting down all over the map over the last 2-3 years. In fact in Canada, the forestry sector used to employ more individuals than the auto industry. But the forestry companies did not get the bail out. Do you know why? This is because of the softwood lumber agreement between Canada and the US. The US will cry foul if any bail-outs were handed out to the forestry industry.

But the same US thinks the auto industry is too big to fail and it pumps in money even though GM and Chrysler have been in dumps for a long time now. Worse, they expect Canada to follow suit.

If we were in a completely free economy with market forces at play, I would agree with you 100%. But with all the US government intervention that I am seeing (AIG bonus issue, GM/Chrysler & union negotiation interference) I have to say that good money will be thrown after the bad by the big brother. It is big brother running the show now.

Heck, the bonuses at Freddie and Fannie were more than AIG, but not one peep from the government or the public!

By: Hal

Hal — Fri, 10 Apr 2009 14:23:19 +0000

I still have to disagree with you about “too big to fail.” There’s always vested interests and the outcome is going to be painful. But we can’t go on rewarding wrong headed thinking and actions. That just leads to further companies and people to do the same wrong headed business schemes for short term payouts and then cut and running for big brother to clean up the mess and take over. And big brother isn’t qualified.

By: CA

CA — Thu, 09 Apr 2009 22:31:03 +0000

No, Hal, there are too many vested interests in action to allow to incompetence to fail. America has long tread away from the path of a total free economy. But it was (is??) still the world’s most free economy.

It will be interesting to watch the specter of inflation zoom once credit starts flowing … dramatic increase in interest rates … and again a stronger dollar with all its deficits …

One day at a time, Hal, one day …

By: Hal

Hal — Thu, 09 Apr 2009 21:42:57 +0000

This will make you laugh or pull your hair out. Maybe both.

Congressional Panel Suggests Firing Managers, Liquidating Banks

This is crazy. Our free market society was supposed to liquidate these bad banks to begin with. That’s what it does with failed businesses. It’s what keeps the markets strong and thriving. Should have liquidated them to begin with. No business or country for that matter is too big to fail.

What’s too bad is I doubt that the advice of liquidating them will be heeded.

My guess is that it won’t be too much longer till all that money they printed leads to inflation. Which should be good for the gold and silver markets and ETFs.

ExactPrice shows gold’s been falling but I think that’s because the IMF announced their intentions of selling some 400 tonnes I think it was. We’ll see if that takes place but I think it’s probably a good to time in light of this news that the government really is clueless to see about finding some hard currency.

Which reminds me of all the local governments now printing their own currencies. That’s pretty telling if you ask me.