Interesting story in the London Telegraph today. Britain is on the verge of Bankruptcy. They’re in the same financial boat that we’ve been in, the only difference is that they’re significantly more “regulated” (a major liberal catch word during the campaign when the left was trying to pin every financial issue in the history of the universe on President Bush) than we are. The British government also bailed out the banks, and what was the result? Iain Martin has this to say,
The Government’s bail-out of the banks in October with £37 billion of taxpayers’ money was supposed to have “saved the world”, according to the PM, but now it is clear that it has not even saved the banks. Our money kept the show on the road for only three months.
That’s right. Three months. Thirty-seven billion pounds ($51,533,601,224.42) served to keep the British banks afloat for three whole months. We read at home about Citibank, struggling, splitting, coughing and sputtering after their handout. What’s the lesson in all of this? British Liberal Democrat Treasury spokesman Vince Cable asked,
…Where has the £37 billion gone? The answer, as Cable knows, is that it has disappeared down the plug hole
Brilliantly said, I believe. Thirty-seven billion down the plug hole. Which is just where I expect most of our bail out dollars will end up as well.
So what’s the lesson in all of this?
- Free money doesn’t work. It doesn’t (and hasn’t) spark or boost a slow economy. Free money to poor money managers goes directly to saving their own indebted butts… down the plug hole, if you will.
- Free markets do work. Competition works. It will regulate itself, but you have to let it do its work. Unfortunately (or fortunately, whichever you prefer) the way it regulates is by causing those who don’t honor it to close up shop. The U.S. Government, by bailing out anyone and everyone who asks, only perpetuated bad business practices and those who practice them.
Super-regulation didn’t save the UK, and Gordon Brown is feeling the burn right now. The United States may not be far behind. My only hope is that fiscal conservatives will be there to sound the clarion call of fiscal responsibility within the context of truly free markets.
One can only hope.
Pictured: British Prime Minster Gordon Brown, who Martin chastizes in his editorial
