03.31.08
Beware the Economic Power Grab
Benjamin Franklin famously wrote “Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety”. We are all well aware of the importance of this wariness when it comes to trading our political liberties for physical safety.
We should, however, be equally wary when offered the chance to trade economic liberty in exchange for financial security. The nation is sliding into a recessionary credit squeeze, brought about by the imprudent actions of many parties, including the Federal Reserve, Fannie Mae and Freddie Mac, institutions that are meant to help regulate our economy. Recently, the HUD secretary Alphonso Jackson, perhaps uniquely positioned to help oversee the responsible development of housing among the less fortunate, resigned under allegations of corruption.
What an interesting time, then, for the Treasury Secretary Paulson to unveil sweeping new proposals to overhaul our nation’s financial regulatory system. Apparently these proposals have been in under development for a year or more, well before the current economic downturn, and by all accounts, they would do little or nothing to deal with any of the issues that led to the current crisis, spurned by the collapse of mortgage-backed securities. This raises the interesting question: why is the Bush administration, with less than a year left in office, pushing for a vast overhaul of this system?
Let’s not allow the administration to once again take advantage of our present financial fears and encroach on the economic freedoms that fuel the long-term strength of our economy. It is bad enough that our government is using our tax money to bail out individuals and corporations who made bad decisions, creating a moral hazard for speculators by cushioning their risk. It is an even greater travesty to allow our leaders to usurp our economic freedom in the name of taking care of us… and from a Republican administration no less!
