Killing 2 birds with 1 stone

Posted: Friday, September 26, 2008

This letter concerns the proposed bailout of the financial industry being considered in Washington. I find the idea very disturbing. But, it seems to me that we can kill two birds with one stone, if they do it right. I don't know about you, but I have never heard any financial advisor, analyst, money manager, stock broker, banker or anyone like them ever advocate buying worthless stock from a company fraught with bad debts. Yet, our brain dead, lame duck president is suggesting we do just that. It reminds me of the failed businessman who said he knew he was losing money, but he thought that the volume would make up for it.

Since 1980, at the onset of Reagan's Trickle Down Economics, industries have been clamoring for deregulation and lower corporate taxes. The idea is to get government out of the way and let the market dictate. We have done that. Now that the market is about to collapse, or so we are told, they clamor for government to bail them out. How does that work? If government pays with public funds, then there comes with it regulations to protect the public's interest. Do they want regulation or not?

In addition to the financial industry's mismanaged failings, we did the same thing with the oil industry, beginning with the Arab Oil Embargo of 1973. We deregulated the oil companies, dumped huge tax exempt profits on them, gave them subsidies for cheap access to federal lands and grants for exploration.

The purpose was to reduce our dependence on foreign oil. It was like paying the tobacco companies to find a cure for lung cancer. After 35 years they have failed to accomplish it. We are more dependent on foreign oil than ever before. The oil companies have neither the will nor the ability to do what we asked.

So, I propose that rather than dump $700 billion, or more, into buying bad debts and nationalizing the finance industry, why not use that money to buy up the oil companies and nationalize our energy industry? Invest all that money into an industry that is making record profits rather than one that is suffering record losses.

Doesn't that make more sense? Buy out ExxonMobil and Phillips and use the tens of billions in profit from each of them to help people pay off mortgages. We could use the money for other purposes, too. Promote other energy sources, pay for health care, bolster Social Security to give meaningful support to the elderly, build the finest schools imaginable. Or, reduce our dependence on foreign oil.

Bill Holloway


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