Wednesday, February 23, 2011

redistribution of what?

Obama’s image of America is practically opposite from the reasons She was founded. The Constitution was set up to apply to government more so than citizens. Like most liberals, Obama lacks impulse control in the macro sense. In other words, most liberals go along with helping hand ideas because they are compassionate, and want to display empathy for anyone needing help. This, of course, gives them the moral high ground to argue their position. Wouldn’t the world be just wonderful if everyone were as compassionate as them etc.?
This is a short term feel good solution that everyone should be on board with. “How can you take food away from a child?” Obviously, it can’t and shouldn’t be done. But why was the child hungry in the first place? Was it due to choices made by the parent? Or is it because the parent has suffered a debilitating circumstance? Or, is it that without help from the government that child would go hungry?

Let me offer a perspective from Benjamin Franklin.

“I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it.”

Conservatives look past the feel good result of the impulsive solution. The feel-goodness only applies to those issuing the helping hand. The attitude of those receiving it is more like “could you spare it?” It certainly doesn’t make the receivers feel good. It obligates them. And the politicians know it.
What are the long term results of the helping hand policies? What ended up being the unintended consequences of them? I’m convinced that it turned out perfectly for the progressive movement and for the progressives pushing the policies. The more people dependent on government, the more power can be amassed, all in the name of helping hand and fairness.
As to the fairness part of this, it’s perceived as getting even with those who have more than others. What a big trap this has become. It’s class warfare waged on anyone marginally successful. How dare they become successful outside of government control. Wealth then needs to be redistributed.
Yeah! All right! Stick it to ‘em!
So, as part of the redistributive legislation, let’s take a look at who was helped.

Bear Stearns 2008 JP Morgan Chase and the federal government bailed out Bear Stearns when the financial giant neared collapse. JP Morgan purchased Bear Stearns for $236 million; the Federal Reserve provided a $30 billion credit line to ensure the sale could move forward.
$30 billion

Fannie Mae / Freddie Mac 2008 On Sep. 7, 2008, Fannie and Freddie were essentially nationalized: placed under the conservatorship of the Federal Housing Finance Agency. Under the terms of the rescue, the Treasury has invested billions to cover the companies' losses. Initially, Treasury Secretary Hank Paulson put a ceiling of $100 billion for investments in each company. In February, Tim Geithner raised it to $200 billion. The money was authorized by the Housing and Economic Recovery Act of 2008.
$400 billion

American International Group (A.I.G.) 2008 On four separate occasions, the government has offered aid to AIG to keep it from collapsing, rising from an initial $85 billion credit line from the Federal Reserve to a combined $180 billion effort between the Treasury ($70 billion) and Fed ($110 billion). ($40 billion of the Treasury’s commitment is also included in the TARP total.)
$180 billion

Auto Industry 2008 In late September 2008, Congress approved a more than $630 billion spending bill, which included a measure for $25 billion in loans to the auto industry. These low-interest loans are intended to aid the industry in its push to build more fuel-efficient, environmentally-friendly vehicles. The Detroit 3 -- General Motors, Ford and Chrysler -- will be the primary beneficiaries.
$25 billion

Troubled Asset Relief Program 2008 In October 2008, Congress passed the Emergency Economic Stabilization Act, which authorized the Treasury Department to spend $700 billion to combat the financial crisis. Treasury has been doling out the money via an alphabet soup of different programs
$700 billion
Citigroup 2008 Citigroup received a $25 billion investment through the TARP in October and another $20 billion in November. (That $45 billion is also included in the TARP total.) Additional aid has come in the form of government guarantees to limit losses from a $301 billion pool of toxic assets. In addition to the Treasury's $5 billion commitment, the FDIC has committed $10 billion and the Federal Reserve up to about $220 billion.
$280 billion

Bank of America 2009 Bank of America has received $45 billion through the TARP, which includes $10 billion originally meant for Merrill Lynch. (That $45 billion is also included in the TARP total.) In addition, the government has made guarantees to limit losses from a $118 billion pool of troubled assets. In addition to the Treasury's $7.5 billion commitment, the FDIC has committed $2.5 billion and the Federal Reserve up to $87.2 billion.
$142.2 billion[i]

These don’t represent any sort of wealth redistribution. The bailouts are redistribution though. Redistribution of poor decisions. Redistribution of bad mistakes - big ones. Redistribution of mismanagement. Redistribution of failures.
So, these are examples of redistributive legislation. All of it passed because of some emergency. No one was prosecuted or sued.


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