The ideological differences?between conservative and liberal thinkers on economics has blurred in recent years.?The Republicans (who had control of Congress and increased their margins in 2004) have spent as?much and in fact in some cases, more irresponsibly than the liberals of the last 20 years.?One major reason why I think?it’s?more irresponsible:?at least the liberals try to pay for their spending increases with tax increases rather than saddle future generations with enormous budget deficits and a national debt?that has doubled in eight years.?

This being said, I think that most mainstream people on both sides knew that something needed to happen last month and therefore the bank bailout became a reality.?The idea being that most of these banks will survive and therefore will be able to repay any borrowed funds and in some cases, the taxpayers could actually earn some decent returns. The idea of a bailout is definitely contrary to conservative economic theory, but there is an idea that regulation is against a free market society as well (and therefore contradicts conservative economics). I couldn’t disagree with that more. Responsible and managed oversight and regulation is very much a part of a well oiled financial system and part of a free market economy. It is in this regulation and oversight that the American government failed the people. Mortgage brokers were allowed to aggresively mislead prospective homeowners into products that much of us in the financial community may have had a hard time understanding. People, understanding?full well that they couldn’t afford a home or that in two years their interest rate would rise by four percent, still went ahead with that decision. Banks irresponsibly levered up packaged securities that they were buying so that a one percent change in prices or the impact of even?historically low level of mortgage defaults would wipe out all their equity and cause them to have significant margin calls.?There is a lot of responsibility and a lot of blame.?I think it’s interesting that members of Congress like Barney Frank continue to say that they were at the forefront of this issue and that they were trying to fix it. This is clearly not what Mr. Frank and other members of Congress including the President?were doing.

Let’s turn to GM, which is?part of?the “Big Three”.? I think that it is incredibly amazing that we are trying to equate the GM bailout with the bank bailout. These two things could not be more dissimilar.?The banking industry in America is robust, ahead of the curve and?the pride of our nation. Investment banks have helped shape our national fiber and made us a leader in the global financial marketplace, specifically over the last?50 years.?General Motors is a failed institution trying to keep up with times of the past. Manufacturing in general, and GM specifically, is just not what this country is built for anymore. If this bailout is going to be passed (which I do not believe it should be in it’s present form), we would be better off handing each GM worker a check for their share of the proposed buyout or invest that?money in re-skilling and re-training those workers to do something else. Then, we could keep GM, help them invest significantly in technology and start building their cars overseas (where it’s cheaper and more efficient to do so).?The?two main reasons?that?GM and the Big Three?are so unsuccesful is a) terrible innovations and not being able to keep up with technology and b) too expensive of a workforce. They have spent so many years trying to get ahead of Honda, Nissan etc. but never are able to, they just don’t have the infrastructure in place to do so. American companies can do anything they put their mind to, however, the auto industry is so old and broken that it just can’t get ahead or even?stay in pace.?The American workforce has just transformed itself too much over the past 40 years. Through the middle of this century, manufacturing jobs were huge and helped America grow to the economic powerhouse that we still are (even today). As the American class system and the American consumer became more sophisticated and more wealthy, the ability to survive in the age of working on an assembly line went out the window. Our autoworkers can simply not be a part of the middle class anymore and if we want them to be, well, a Ford Explorer may cost us $75,000.