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Nick Jefferson

Nick Jefferson

Posted: September 22, 2009 02:20 PM

The Problem With Bail-Outs

What's Your Reaction?

For a moment, let's put party politics and arguments about what government is, and is not, for to one side.

Because it seems to me that anyone who is interested in effective management should be exceptionally wary of public bail-outs for much more prosaic reasons.

Whether or not any of us thinks that bail-outs can be justified in principle, in practice they tend at best to reinforce poor management, and at worst they even reward it.

I cannot think of a single example of an industry or sector that has been bailed out over the last 18 months that is not also well-known for its poor management practices. Newspapers, the latest in the long line outside the Oval Office, are a prime example.

So what kind of message does a taxpayer-funded bail-out provide?

"Keep up the good work guys. Carry on regardless."

Now those familiar with the fine detail of the bail-out packages will retort that, because of the large sums of money involved, these deals are conditionalised on improved management practices, in order to return maximum value to those 'investing'.

That may be the intention. But history suggests that, over and again, the required changes just simply don't materialise.

And why should they? When a slovenly management culture is not forced, by a disastrous bottom line, to rethink totally its approach, any attempts at change are more than likely to be half-hearted at best.

When did you last walk into a bailed-out bank, automobile manufacturer, coal producer, aircraft maker, telecoms business or postal service and think, with the smug sense of satisfaction that only a wise investor can enjoy, "Yes, that's a really well-run business"?

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11:41 AM on 09/25/2009
"If you want to remain slaves of the bankers and pay for the costs of your own slavery, let them continue to create money and control the nation's credit."
Sir Josiah Stamp

"Let me issue and control a nation's money and I care not who writes the laws"
Mayor Amschel Rothschild

"Whoever controls the volume of money in our country is absolute master of all industry and commerce, and when you realise that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate."
James A. Garfield, 20th President of the US, two weeks before his assassination

" I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation and then by deflation, the banks and the corporations that will grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered. THE ISSUING POWER SHOULD BE TAKEN FROM BANKS AND RESTORED TO THE PEOPLE, TO WHOM IT PROPERLY BELONGS"
Thomas Jefferson

This is a documentary from the 90s that tells the whole scary story...a MUST-SEE! Audit the FED!!
http://video.google.com/videoplay?docid=-515319560256183936#
08:21 PM on 09/23/2009
I don't think the bail outs have anything to do with how well managed the company is. It's all about keeping the country from imploding which is the only reason to do a bailout, because there is no other option.