Dreams walking in broad daylight

This is my response in an e-mail conversation I had the other day about "the bailout."

I don't claim to have a strong economics background, by any means. However, I do try to understand. I tend to agree with Milton Friedman on most things financial and political (I'm, small L, libertarian -- non-party affiliated). "When it comes to free markets, you have to have loss for there to be gains." I believe that is what risk is all about. However, I don't think we truly have a free market here, but it's definitely not socialism (yet). So, I grudgingly agree that the government may have to help out in a situation of their making (Fannie/Freddie). I think the plan defeated yesterday was terrible, and I'm scared what they will come up with next. Bush 41 seemed to have a good plan for the S&Ls, but I don't think this is going to end as well.

My problem being that I don't own a home, and a bailout will probably make it more difficult for me to own. There is no way I would ever take an ARM, and a few years ago I couldn't afford a fixed-rate. Houses are so inflated right now, that I don't see much opportunity for me unless the people who over-extended themselves actually fail. That may be cold, but that's the reality of it. Also, I see this bailout as a temporary fix. Without bankruptcies, I think this situation will probably rear its head again down the road. There is a remedy (let the market correct itself), but people blame politicians for their own problems and politicians CYA.

I didn't make these mistakes, yet I'm going to have to pay for it. So much for managing my own risk...

Perhaps what I said was somewhat prescient. This is part of what the Senate passed yesterday:

House Republicans also welcomed a decision Tuesday by the Securities and Exchange Commission to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market.

Isn't that part of what got us Enron and the accounting scandals? Now, instead of hiding losses in off-shore shell companies, now they just don't have to report it to investors. How is that fair (or accurate) for interested parties?

I tend to believe the best government action is inaction.

UPDATE: Taxpayers For Common Sense posted the Top 10 Tax Sweeteners of the Senate's "Bailout Bill."