Bail Out?
We are all hearing about the Government cash, or should I say the taxpayers cash, that is being handed out to the failing financial institutions, the latest being Citi Group.
You cannot solve, in the long term, a debt problem by creating more debt. These institutions have enjoyed huge times of insane money making and through greed and loose credit policies, they are now facing their reality. More importantly, where is the incentive to succeed, when failure is simply countered with a lifeline?
I wonder what would happen if I wrote to the Prime Minister in the UK, asking him for a loan - I can tell you that I would be referred to a local government office and told about the various 'schemes' that are in place to help business people like me. After a few months of due diligence and a few meetings, not to mention cutting through the 'red tape' my case would be either approved or not and maybe I could get some cash. Alternatively, I could be the CEO of a Global financial corporation, that you would expect to know a thing or two about money, especially how I judge others on how they use it and advise them where to invest it and steer myself into a financial tsunami and guess what, the 'red tape' and due diligence doesn't exist anymore and I get my cash and rescue my Company and probably walk away with a few million as well!
Capitalism is founded on the 'boom and bust' cycle and it is the very nature of capitalism and 'corrective' periods have occurred throughout history and they must be allowed to 'correct'.
~ Neil
Tags: capitalism, CEO, collapse, finance, government
