Bank of America and Citigroup shares took a beating last week in the stock market because of fears that the US Government would take over both banks, wiping shareholders out. B of A shares were down 19% Friday to $3.20 and Citigroup's fell 20% to 2.00/share. Both stocks have lost 90% of their value in the last year.
Are the government bailouts, subsidies and stimulus packages propping up industry value or are they hurting? Is all this government money pouring into banking, the auto and housing industries encouraging investors? Or is it scaring them off due to fears of nationaliztion? (the government steps in, owns everything and the private investors are left holding worthless paper)
Government meddling tends to create more problems than it solves. The Obama crowd are weighed down with self-interest and pork barrel projects that cause them to loose perspective.
Ronald Reagan defined the US Taxpayer this way: "Someone who works for the federal government but doesn't have to take the civil service examination."
My favorite example of government's ability to run private businesses harkens back to the days of the Mustang Ranch, a Reno, NV area bordello. The federal government took over the Mustang Ranch and ran it at a loss. The government couldn't turn a profit running a house of ill repute. Finally the feds brought back the suspected tax cheat and allowed him to run it to keep them from pouring more taxpayer's dollars into the whorehouse to keep its doors open.
I fear for us all if the federal government takes over all the banks.
1 comment:
"The federal government took over the Mustang Ranch and ran it at a loss"
I refer you again to "Parliament of Whores" by Saint P.J. O'Rourke.
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