Tuesday, February 24, 2009

Why has the stock market taken such a dive?

The simple answer is that too many politicans have been talking about nationalizing the banks.

Politicizing our banks will crush our economy, and prudent investors know that.

Study your history, ye socks! We used to have a national bank back in the early days of our republic. But, Andrew Jackson wisley dismantled it.

Governments are inherently inefficient machines, and they bring their inefficiencies to the market place whenever they take over any business.

They do not have the profit motive necessary to succeed in the private sector. Remember, it was governmental regulations that required banks to give mortgages to people who couldn't make downpayments--or, worse, whose only source of documented income was government welfare programs.

This lack of a profit motive has resulted in government-controlled institutions elsewhere around the world to engage in predatory pricing. In the case of the banks, they would be able to offer below-market loan rates (especially to applicants with the "right" political connections) and thus force any remaining private sector competitors out of business.

Scary though, huh? Yeah. The folks on Wall Street think so, too . . .

Hope and change!

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