Financial Bail Out

Unbelievable. The government is bailing out banks and financial institutions that made bad business decisions and bad lending practices. For all those bad practices, we the taxpayers are put on the hook for it.

Lehman Brothers and Merill Lynch fell and AIG needed an $85 billion government bail out to keep from going under.

What would happen if all the bad banks would go under? Probably the worse financial crisis since the Great Depression. I honestly doubt it. Our economy is much more diverse and stronger than back then. Sure the economy wild be shaken to its foundations but we'd survive. Plus all the deadwood banks and mortgages would be washed out of the system.

Instead, Uncle Sam extends a hand and puts the taxpayer to foot the bill. Now all those bad business practices will payoff. Banks that made bad decisions will survive. They will probably do it again in the future. Why? Cause Uncle Sam will get them out of trouble again.

So what should be the solution? I'm not sure except for one thing. Such actions should be criminalized. If a bank knowingly takes certain actions and makes certain decisions that pad the books that undermine the financial integrity of the institution then those actions should be subject to criminal prosecution.

I'll give an example. I work in the petrochemical industry. We have contracts with the government to supply jet fuel to the U.S. military. If someone falsifies data or neglects to fulfill parts of the contract, that person is criminally liable for those actions. Furthermore, if management becomes aware of a problem and neglects to take action, those in management become criminally liable.

Ah ha, you say, but that's because you are dealing with the federal government. Well, I say, banks are no different. They too are regulated by the federal government. Regardless, the government can enact laws banning certain practices and make those who break the law personally liable. In my example, not only are violators personally liable but the company is also subject to criminal prosecution and civil lawsuits by the feds.

I'd like nothing more that to have the government's hands off our financial markets. I'd like even further if banks, financial institutions and the people who run them not get greedy and not practice horrible decisions to achieve profitability. However, we don't live in a fantasy world and those ideal conditions won't ever exist. Instead, I prefer the government enact laws and regulations to curb these practices and not put the burden of the mistakes on the taxpayer.