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	Name:	MartiniMan -
	Subject:	Hard to Believe that
	Date:	1/7/2009 11:41:23 AM

Hound: I think you misunderstand the concept of "private companies know how to deal with downturns". What he really means is that absent some rationale, the marketplace is the better place to redress poor business practices and if left alone will usually do that. There is a credible role for government oversight and regulation but I would argue that it is significantly less than you believe it should be.

I have several thoughts about the corporations asking for bailout money and am curious your reaction:

First, I think you are forgetting who caused this mess in the first place. The credit meltdown was directly caused by government distortion of the credit markets through the Community Reinvestment Act, FANNIE and FREDDIE. Ignoring who in Congress caused the mess or who tried to fix it, the fact is that the current problems we have were caused by the government, obviously with private businesses participating in what has turned out to be a giant Ponzi scheme.

Second, I would not want the federal government as a business partner. A customer maybe, but not a part owner. AIG found this out when they were blasted in the media and by their government sugar daddies when they sent a group of the high producing salespeople on a resort trip. Those of us in business would look at that and say it is good business to keep your best producers happy.

Third, the U.S. has the second highest corporate tax rate in the world (second only to Japan). As an example, U.S. oil companies alone paid $138,000,000,000 ($138 billion) in taxes to the federal government just in 2006!!!! That's just a handful of companies. Since the corporations have sent trillions of dollars to the federal government why should they not get some of that money back when the economy falters? Who do you want to give it to, people who don't pay federal taxes?

Finally, if we have learned anything over the last 50 years the government is not efficient or effective in its use of the fiscal resources. We have all heard the tales of $250 toilet seats, etc. but these only scratch the surface. Lets examine what results we have from LBJ's war on poverty....trillions spent and almost no improvement. Let's look at the results from federal funding of our education system.....let me rephrase that....failing education system......trillions of dollars and can anyone argue we are better off than 50 years ago when we led the world? I could go on and on but just a small example near and dear to my heart. When we sample a groundwater monitoring well for a private client we send one individual who is usually a technician. When we sample a groundwater monitoring well under a federal contract they require three people, the lowly technician, the QA officer and the chemist. Same product, same result, almost three times the cost. But they did use the low bidder! What a joke.