I spent about 30 minutes this morning on a White House conference call during which Ed Gillespie, Counselor to the President, tried to talk up the idea of bailing out irresponsible banks and borrowers. I don’t question either President Bush’s or Mr. Gillespie’s conviction that they are doing the right thing, but the call confirmed every suspicion I had that this White House gravely misunderstands the current financial situation and its causes.
Mr. Gillespie started off by saying that he hoped that everyone had heard President Bush’s speech last night, in which he laid out the causes of the current financial situation. But in the speech I heard, the President danced around the real root cause of the mess: human sin, particularly greed, laziness, and irresponsibility. And he showed no understanding of the ways that government has enabled these vices, through the creation and expansion of a welfare state that fuels an entitlement mentality. And because he doesn’t understand government’s complicity, he seeks to expand it.
The spectre that Mr. Gillespie raised if a bail-out plan doesn’t pass reveals the flaws behind the thinking at the White House: People won’t be able to borrow money to buy houses, cars, educations, or flat-screen televisions. Yes, he really mentioned flat-screen televisions. The taxpayers are being asked to foot a $700-Billion bill so that people can continue to buy fancy TVs–on credit.
But if there’s anything that the current situation reveals it’s that America cannot borrow its way to a synthetic utopia, where everybody has a house, a car, an education, and a flat-screen TV, as a matter of entitlement. And for the taxpayers to assume hundreds of billions of dollars in debt in order to address problems rising from excessive borrowing would be laughable if it weren’t so morally and financially hazardous.
Mr. Gillispie insisted that nobody had come to the Bush XLIII White House “to promote a massive government intervention in the economy”. Then why are they doing it?