Herman School of Business
Paying Twice For Others Mistakes...
If you had your home re-appraised by your local government when the housing market exploded then you will be paying higher taxes because people were allowed to buy the house next door with no money down and no ability to actually repay the mortgage. That was bad enough. You saw his grass grow higher as his stress level went through the roof while he pondered how long he could stay in his house for free until inevitably he was kicked to the curb.
Your house shot up in value long enough to get a higher tax rating. Not a single government agency is rushing to lower the value of your home and lose their tax base.
Finally, you feel the end of the nightmare was in sight. Once we run through a rough year or two of selling off the houses that should have never been sold to some homeowners to begin with we could settle down and return to normalcy. Not so fast you financially responsible head-in-the-sand idiot.
Re-enter your government. Instead of letting capitalism work your elected officials have decided that bailing out the Wall Street Greedy Group was necessary and the pendulum has swung over to Socialism so the Fat Cats could run and hide while guess who will pay off the same mistakes for the second time? If you get this part and said We, The People then give yourself a gold star. In fact if you added that not only will you get the honor of paying for the same mistake for the second time…so will your children and your unborn future grandchildren, then make your star platinum.
If you believe this was necessary to save “Main Street” from the mistakes of Wall Street you just don’t understand capitalism. Warren Buffet had four billion dollars at-the-ready to buy Constellation Energy when the price was right for him to make a profit. Other billionaires are now lining up to fleece your government when the assets they are stepping in to buy will ultimately be sold off…to those billionaires. Liquidity was the current problem. The Greedy Group couldn’t get their hands on enough money to keep buying derivatives to sell to each other…and when the music stopped playing there were not enough chairs for everyone. So what. That, my friends is how the game is played when you stack the rules in favor of one group over another.
The government was wrong to push mortgages down the public’s throat to people who should never have been approved and now they make a second mistake by stepping in, instead of forcing companies to sell their assets to private equity first. Instead they will backstop huge losses at your tax expense and then they will sell the assets to guess who…private equity…at a huge discount, which happens to be at your expense.
Before you gain confidence that all will be well…ask yourself where you will get the extra money you don’t have to pay for the same mistake twice.
- Posted: 22 September 2008
- Comments: 0
- Category: Running a business
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