Business

To Those Who Still Oppose The Bailout…

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…listen to Megan McArdle:

It is worth noting, in answer to the libertarians who are wary of government intervention in the economy, that if there is a serious crash, we will get even more government intervention in the economy–and intervention that is much less to our liking. That cost has to be weighed in your assessment.

On the other side, to those who are averse to bailing out Wall Street rather than Main Street, it’s worth noting that Main Street will suffer worse than Wall Street. Because of the way that their compensation is structured, Wall Street bankers tend to do things like buy their houses for cash.

Remember, it was Paul Ryan (R-WI) who said the following just yesterday

“This bill offends my principles but I’m going to vote for this bill in order to preserve my principles… to preserve [the free enterprise system]. This is a Herbert Hoover moment.. he made mistakes during the Great Depression… Let’s not make those mistakes… If we fail to do the right thing, heaven help us—if we fail to pass this I fear the worst is yet to come.”

Trust me, if we don’t pass this economic rescue package and the fallout hits ordinary citizens hard, you will see a swing against the free enterprise system by voters the likes of which you never could have imagined.

Imagine this…

…no bailout passes…
…credit freezes up…
…small businesses can’t meet payroll….
…more banks fail…
…more small businesses can’t make payroll so they fail…
…everybody stops spending except the wealthy…
…stocks tumble further below 10,000…
…the economy hits recession and stays there…
…unemployment rises…A LOT.

Meanwhile…

…Wall Street incurs some losses, but people are still rich and business goes on…
…however, Main Street loses hundreds of thousands of jobs and nobody can buy a home.

Ask yourself: do you think that scenario is plausible?

If so, then ask yourself this: does that scenario make people more likely or less likely to believe in the free enterprise system?

Listen folks, I believe in the power of free enterprise system, but it obviously can’t regulate itself and that needs to change. But I’d rather have a massive bailout than a massive backlash. Wouldn’t you?