Lack of Transparency on Bailout Money Indicates Bigger Problem with Government Accountability

[budb11]

So, who do we go to for finding out where the money went? Representatives? Prosecutors? President? We need to know. It was promised that the bailouts would be transparent.

[lulunarf]

This bailout is probably a lost cause. It will go to the bureaucrats' friends. But Obama is proposing a bigger bailout and we should take into consideration the results of this one and then I guess write our representatives to say we don't want another bailout. We should at least be given some reason to believe the first bailout worked before we're asked to fork over another several hundred billion dollars.

[Auggie56]

I'm calling for the prosecution of Barney Frank and Chris Dodd, in the housing fiasco.

GE got 163 billion without much public notice. Al Gore is a major holder in that company.

[lulunarf]

I didn't know that about GE. Thanks for the info. Government is one big pool of incest.

[Auggie56]

Nice to see a young person taking an interest in politics, rather than just following blindly the crowd.

[lulunarf]

Young people should be most interested. They are the ones who will have to deal with the decisions made today. Thanks for the encouragement.

[lulunarf]

In the free market, corruption is self-correcting, because it's not a viable long-term option. As with Madoff, corruption and fraud work for a little while, but without government intervention, in a totally free-market situation, it would eventually cease to be profitable and then die. In the public sector, however, the lack of a profit motive means corruption can continue indefinitely, since profit isn't required.

[r3dredwine]

I agree with you completely. I just dont see why, what I wrote helped him see his position clearer.

[lulunarf]

I loved your explanation of why fraud/corruption and government are inextricably linked from Mises. Thanks for that.

[SpartanOstrich15]

Exactly, government intervention was the thing that got us into this mess. How on earth are we meant to believe that the government can successfully get us out of it?

[r3dredwine]

There would be less corruption in a free market. Government manipulation of the market favors those who can lobby better and those who can get huge government contracts.

[r3dredwine]

The truth is, as Mises showed, that corruption is an inevitable by-product of an interventionist economy. Every act of government intervention constitutes harm to someone or benefit to someone at the expense of someone else, who is thereby harmed. Naturally enough, people want to avoid being harmed and are eager to obtain benefits.

[r3dredwine]

To the extent that politicians and government officials gain discretionary power to inflict harm or bestow benefits, they are in a position to extort money from the citizens, who will pay to avoid being harmed and pay to obtain seeming benefits.

[r3dredwine]

If one is serious about fighting corruption, the first and most important thing that must be fought is all discretionary power on the part of the government and its officials. The powers of Congress, state legislatures, and city councils must be strictly limited to protecting the citizens against the initiation of physical force (including fraud), and nothing else.

[r3dredwine]

The more the government is pressed back within these limits, the less will be the problem of corruption, because the less discretionary power will the government and its officials have to inflict harm or bestow benefits, and thus the less will be the need and the opportunity for citizens to bribe them. As part of the same process, elections will cease to be bidding wars between pressure groups. The pressure groups will dissolve once the government loses the power to harm or benefit them.

[jayjayfroggy]

I hope more and more YouTubers blog against these bailouts for big business.....lets put the power of YouTube to work for positive change! Thanks lulu.

[lulunarf]

I love how youtube allows citizens to bypass the filter on mainstream media. Thanks for watching!

[quietword333]

Interesting video, but I don't agree with your underlying premise that the 'the market through it's demands for profits make business accountable' There are examples upon examples of businesses that stay running because of fraud and for a long time - they often fold but not all the time - criminal activity is another example of the free market gone bad - the mafia is as well run business based on criminal activity - so I guess in the end it depends on your version of what 'accountability' is

[quietword333]

The free market just like the government is as 'accountable' as the people who run them make them. Just as the government can be inept at running so can businesses be so and still work for a time, accountants fix the books, fraudulent and predatory mortgages are made and no one made them accountable until it was too late.

[lulunarf]

Even private businesses can run inefficiently for a while. But without government intervention, they will eventually be held accountable in the form of failure. Organized crime cannot exist without government intervention, generally in the form of creating black markets by banning things. Organized crime started in earnest in America with Prohibition and now mostly deals in drugs and prostitution, two things libertarians want to see legalized for just such reasons.

[quietword333]

Agree in part about decriminalizing drugs/prostitution, but not from the same core ideaology. As long as accountability is in the form of business failure, you'll still have mass issues with fraud etc. and in your book the business would be run efficiently (profits would be made). Again bad mortgages and predatory lending created the mess we're in because of deregulation. The bail-out wouldn't of happened at all if we'd had more government regulation from the beginning.

[lulunarf]

Actually government intervention in the free market created the housing bubble by artificially expanding the housing market. This was accomplished through the Community Reinvestment Act, and the creation of Fannie Mae and Freddie Mac. These increased demand for housing by creating a market for mortgages from low-income households, a previously underserved population. This resulted in the bad mortgages and predatory lending, which caused prices to skyrocket. This was a government-created bubble.

[quietword333]

Thank you for your response. Your reply has made my position even clearer.

[r3dredwine]

I dont really see why? Considering you think libertarianism is corporatist.

[quietword333]

LOL... my position is clearer because I don't agree and I can see where there are flaws in your argument, including Lulunarf. Simpley put, you will not change my mind nor will I change yours, so best to disengage and move on. The problem with dogma (capitalist, communist, libertarian) is it doesn't see shades of grey. I'm not prepared to discard my personal truth to a blog opinion and you aren't to a comment section (rightly so). Peace out.

[r3dredwine]

please read from top to bottome

[r3dredwine]

Forgive me for saying I think your intelligence is attractive

[lulunarf]

No apologies necessary! Thanks!

[quietword333]

ROFL - everyone benefited from the 'undeserved' receiving these mortgage prior to deregulation. Shrugs- we can't argue because we'll all come back to the chicken versus the egg (government intervention versus deregulation). The problem with this debate is your stance is based on an ideological theory - libertarianism, which is as bad as communism, it's good in theory but when applied to real life situations it creates a system of elitest rewards,enviornmental destruction and corruption.

[Bassmarko]

We are digging in deep and I dont think we can get out of this mess easily. We will all pay for what our politicians do today and have been doing for years. For a fiscal conservative like me this is a nightmare. California will be bankrupt by February. The good news is when the money is gone we will need to be efficient. Peter Schiff and Jim Rogers I think understand this problem well. What will the next 5 years look like? Keep up the good work lulunarf!!

[lulunarf]

Peter Schiff has been right thus far. I can't decide if I'm scared about or looking forward to when our federal bills become due. I hope you're right and we learn a lesson when hyper-inflation starts and China starts wanting its money back. Thanks for the encouraging words.