Timothy P. Carney, editor of the Evans-Novak Political Report has a great op-ed in today's DC Examiner where he calls 2008 "The Year of the Bailout" and why we will rue the day that this incredible list of companies and industries who have been gifted taxpayer money - in one way or another - ever were given permission to reach their hands into our pockets:
Not too long ago, in fact, at the beginning of 2008, the U.S. had a reputation as a free-market economy in which businesses rose and fell of their own strengths or flaws and to their own profit or loss. But 2008 changed all that. Too be more precise, the administration of President George W. Bush changed all that in 2008.
Americans used to get exorcised any time the federal government considered bailing out private interests. When Chrysler got a $1.5 billion loan in 1979 (about $4.25 billion in today’s dollars), there was an outcry. When the Clinton administration bailed out Wall Street bankers in 1994 with a bailout of the Mexican peso, it was scandalous.
But as 2008 wound down, we got bailouts so large and in such rapid succession that we never had time to catch our breath.
And that's putting it mildly. But what about all that cash the Fed has been throwing at the banking industry? That's not from our tax dollars - is it?
Where did the Fed get all this money? Basically, they created it out of thin air. Among other things, this inflation dilutes the value of your dollar, thus making your salary and your savings less valuable. It’s a backdoor tax, taking money from you.
With the printing presses working overtime, the White House giving away cash despite the objections of Congress, and the Congress itself working toward a gigantic stimulus package, what does it all portend for the future?
Different analysts place different price tags on the 2008 cornucopia of bailouts, all in the trillions. But the real costs are not limited to money authorized and spent last year.
The true costs are the astounding creation of moral hazard (why not be risky if government will just bail you out?), the unprecedented expansion of federal power, and the blatant shredding of the Constitution’s separation of powers between the executive and legislative branches.
The Bush bailouts were horrible, but what will future presidents do with this power? Today, many Americans are glad 2008 is over. Soon, we’ll wish it never happened.
Read the whole, frightening thing.