Catching a Falling Knife & The Stimulus

2/27/09

Have you ever dropped a two sided sharp knife and for a split reflex second thought about trying to catch it. Hopefully, that little alert light went off in your head and the best decision – wait till it hits the floor, was what you decided on.

As of today, our economy is like that knife, it is in free fall. Millions of Americans would love to reach out and catch that knife, just before it hits bottom, but their gut tells them otherwise. The savvy investor or consumer knows that if you buy a house, car, or stocks before the knife hits bottom, you stand a great chance of being cut.

One of the many things that anoys me about the Obama Stimulus package is their reluctance to let the knife hit bottom. Because this administration is trying to be all things to all people, he is preventing the knife from hitting bottom.

President Obama must stop interfering with the natural process of capitalism by buying up “toxic” assets, propping up companies that are on life support, and the soft socialism of supporting people owning homes that have never fit rational lending practices.

Credit markets must be allowed to flow, and I understand that, but to prop up companies that would be better off restructuring through bankruptcy courts is pandering to the populist crowd. Yes, I know, Bush did the same thing and so was he wrong.
President Obama and company, believe in capitalism. Let the knife hit the floor so we can do what we have always done – recover and rebuild.

Guy Midkiff

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Published in: on February 27, 2009 at 8:50 am  Leave a Comment  

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