Too big To Fail Legislation - Danger, Danger

The illustrious, Democrat Socialist Congressman Barney Frank and tax-cheat Secretary of the Treasury Tim Geithner are working on Too Big To Fail legislation that would allow the federal government to nationalize any company deemed too large an influence on the American economy for the government to allow such company to go out of business. That strategy hasn't worked too well for bankrupt GM, has it? Think about it. There are many, many large corporations with dominant market share that have a much bigger impact on the US economy than GM. So if the government can nationalize GM, the banks, insurance companies etc. under the the Too Big To Fail premise, why not the rest of corporate America? There are companies like Wal Mart, that Democrat Socialists want to unionize, McDonald's, Procter and Gamble, (a large consumer products company), Boeing, Caterpillar, Google (that dominates the Internet), Fox News, Hewlitt Packard, Dell, Exxon Mobil, Chevron, Fed Ex and UPS (that compete with the Post Office) etc. etc. etc. These companies and many more employ thousands if not hundreds of thousands of employees. Wal Mart is the largest employer in the country with more than 1,000,000 employees; hence the push by Democrat Socialists for unionization.

Of all people pushing for this, Congressman Barney Frank was a primary cause for the financial meltdown because Frank refused to regulate Fannie Mae and Freddie Mac because of their huge contributions to his campaign war chest. Frank and other Democrat Socialists including Obama were on the take so to speak. And, Tim Geithner was the whiz kid head of the New York Federal Reserve just a few blocks from Wall Street and the big banks and did nothing to regulate the financial system that he was a part of. These two are like Abbott and Costello in a comedy routine except that we should all be crying not laughing. These characters are Socialists who believe in a command economy run by the federal government. The only problem is that this thinking has lead to disaster in other countries. Britain is a prime example; though there are many. Britain has primarily been a socialist country for years, except for the brief interlude when Margaret Thatcher was Prime Minister. Even then, there was only so much that Mrs. Thatcher could do to reverse years of Socialist policy. Today, Britain is bankrupt, even worse than the US and their economy is a basket case.

The reality is that the boom and bust cycles that happen in a capitalist market economy; though often very painful, are necessary to innovation. As someone who has been in business for 30 years working with major corporations in 46 states, Europe and Asia, I have seen this close up. I have worked through three recessions, downturns in the real estate market, very high mortgage interest rates and other calamities like 9/11 and in the end, it is always free market capitalism that brings back prosperity. Today, I am dealing with the New Normal specific to my company, which has required lay off 's and restructuring; but in the end will result in a stronger company. If I was getting a government subsidy to prevent bankrupcy, there would be absolutely no incentive to work smarter and improve my company, which ultimately would be bad for my company.

Years ago, when I was a very young manager, I worked with IBM to move their Selectric Typewriter factory from Lexington, Kentucky to Boca Raton, Florida. Wisely when IBM entered the personal computer business as a pioneer, they sold the typewriter business that is no more. They saw the proverbial writing on the wall or computer screen so to speak. And then, when IBM got their socks knocked off by a fellow in Austin, Texas named Michael Dell, who came up with a better idea called Dell Computer, IBM sold their PC business to Lenovo, a Chinese company, because of eroding margins on PC's to focus more on services. IBM went through some very painful years reinventing their company and they are better for it today. Dell had a good run and made a lot of money; but just recently Dell realized that margins were just too low and that making money on postage alone wasn't going to do it for them, so they bought Perot Systems so that they could begin focusing on services. The point is had the government intervened with subsidies picking winners and losers as happens in a command economy, based on political influence, IBM might still be making IBM Selectric Typewriters even though there is no market for them.

We see this with Obama's CAP and TAX Bill, which will penalize current energy sources that are viable as a bridge to the future and subsidize solar, wind and bio-fuels, which are not economically feasible today. The best example of this distortion of free markets is ethanol, which would not be feasible without government subsidies. The funny thing is that more energy is used to produce ethanol that it saves. And, using corn to produce ethanol results in higher food prices because corn is a food for live stock. The point is that whenever government gets involved, it makes matters much worse than if government just minded its own business. Well the federal goverment did need to stabilize the financial system to deal with this financial "crisis". Goverment as run by Democrat Socialists always draws the wrong conclusions and over reaches which is exactly what is happening today; hence the reason unemployment is still high instead of going down. We have what is called a "jobless recovery", by Keynesian economist, which is nonsense. Tell the guy out of work that can't make his mortgage payments that the United States is experiencing a recovery.
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And, let's face it rather than worrying about private enterprise, the federal government really does need to mind its own business and deal with bankrupt Social Security, Medicare, Medicaid, the Post Office, the FDIC and Amtrac. In fact, wouldn't it be nice if Congressman Barney Frank and Secretary of the Treasury Tim Geithner starting minding their own store, the federal government, instead of trying to take over American business. Just maybe Frank and Geithner could do something to bring down unemployment instead of using Keynesian economics to accept it as inevitable.