Lew Rockwell on the latest Obama boondoggle:
Are you all for Obama's economic plans? Do you think that bailing out failing companies, and throwing trillions into the national money pit, is just the ticket for stimulating the economy back to recovery?
Then you might get the chance to put your money where your ideological convictions are. The Obama administration is cajoling investment companies to create bailout bonds. These would be similar to the bonds that wartime presidents created to find sucker-investors for their wars. Americans were browbeaten into buying them as a patriotic duty. So too those who say "yes, we can" to the bailouts will be asked to do their patriotic duty, and buy the debt of loser companies.
It's all part of the war on depression, which is destined to be as successful as the war on drugs. But, hey, if it is a good investment, why not buy bailout bonds? Well, there's a problem. The bonds represent credit extended to companies and projects that are proven market failures. Creating these bonds is a way of institutionalizing the principle of buying low and selling lower.
So why would anyone do it? Well, an article in the New York Times says it is a good deal because the bonds represent underpriced assets. The economy will recover and the mortgages with them. "If all goes well, the funds will eventually sell the investments at a profit."
Catch that? "If all goes well…"
If all goes well, I can leap out my window and fly to the moon and be back by lunch.
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