Whether you are a Democrat, a Republican, or an Independent, odds are that you oppose the recent $750 billion bailout of the banking industry. This is a pretty easy prediction to make because the overwhelming majority of Americans (and more than a few folks from abroad) oppose the Treasury using their tax dollars to pay for the risks taken by big banks and the greed/ignorance of homeborrowers. That our politicians chose to vote against the will of the people is a sad example of how knee-jerk populism can blunt the mind.

        As we predicted as clearly and loudly as possible, the bailout has had worse than no effect -- its has sent the markets into a tailspin. This financial freefall was caused in large part by a crisis of confidence, and a huge lurch toward Socialism by a heretofore rabidly capitalistic government does not restore confidence. Who could of predicted that? (Answer: anyone who actually thought about it.)

       Which brings us to the critical point at this critical juncture in American history: politicians need to start making economic policy decisions with their brains (or brainpower rented from advisers) rather than with their knees. The bailout law passed via HR 1424 is a painful example of what can happen when politicians simply fail to think, critically or otherwise. The bailout gives the Treasury Secretary unfettered control to distribute $750 billion of taxpayers' money in any way he (or she) sees fit. Congress did not specify how the money must be spent, dictate how the money must be used by aided institutions (e.g., not to pay CEO bonuses), or impose any system of checks and balances. Predictably, banks are using the bailout money to advance their own self-interest (they are, after all, for profit entities) rather than to thaw the credit freeze.

       And now more ostensibly private industries are seeking taxpayer assistance (e.g., auto industry, credit card industry, etc.). Stated simply, Congress -- in its rush to judgment -- failed to think through the bases and effects of its actions and, as a result, the law has had unintended (but easily predictable) consequences!

        Of course we all want every American to own a home. But if anything has become clear over the past few years, it is that every American is simply not financially prepared to do so. The reality is that some folks must wait and save to purchase a house -- and that is not necessarily a bad thing. Congress, if its members were actually thinking, would impose strict, nationwide, iron-clad 'loan to value' ratios that would require a minimum down payment of 10% on all home loans. This requirement alone would have prevented the housing crisis.

        Politicians need to take off their populist blinders and recognize that they are not doing Americans or America any favors by bailing out banks, homeowners, or other industries. Bailouts beget more bailouts; they do not solve the underlying problems. Homeborrowers need to learn that you can't treat your house like a piggy bank and not pay for it in the end. Banks need to learn that their private gains are not subsidized by socialized losses. And the auto industry -- and any other private business seeking government assistance -- needs to learn that taxpayers cannot and should not be paying for your mistakes.

        We honestly believe that our President-elect is a brilliant man. Hopefully, his decisions while in office will be guided by that intellect!!!