Your mother and father probably told you: You can't have everything. But for some reason the folks in Washington didn't get the memo. Politicians want to make sure that everyone can have everything they want, without the possibility of failure.
Start with General Motors (GM)and Chrysler. Like addicts, they keep saying just one last time…just one more shot of federal money. But does anyone doubt if we give GM and Chrysler more billions again that they'll soon be back for more again?
Still politicians are probably going to give them more of your money, because neither the politicians nor the car companies want to admit failure.
Next, there's banking. We keep pouring more of your money into bottomless pits like American International Group (AIG) to no avail.
The geniuses at Treasury and the Fed say that some banks are too big to fail. But before this crisis is over, some big banks will fail -- and we will have wasted more of your TARP money trying to prop them up.
Then there's housing. Politicians tell us that they want to prevent foreclosures and keep housing prices from falling further. But you can't clear the inventory unless prices drop further than they have. And many folks in foreclosure should have never been given a mortgage to begin with.
Finally, there’s the Federal Reserve. It’s supposed to maintain the value of our hard-earned dollars. But it’s printed trillions of dollars trying to juice up the economy. You can’t have both; you can’t maintain the value of the dollar if you keep pumping trillions of cash into the market. Soon the Fed will face massive inflation, and a massive decision: A new Fed leader -- one with backbone -- will have to endure political scorn by jacking up interest rates the way Paul Volcker did in the early 1980s to squeeze inflation out of the economy. It may lead to more failures, but it will secure the integrity of the dollar.
Failure is a part of life. You can't stop it or outlaw it. The longer you try to keep it from happening, the worse will be the day of reckoning. It's time for leaders in the government and at the Fed to grow up. It's time for all of us to insist that they grow up.
And that's the final score.
Banks Fail in Florida, Nebraska, Illinois, Oregon
Large banks take beating on Wall Street
Federal Regulator Urges Thrifts to Halt Foreclosures
Government’s proposal for banks comes today
