Hi Jack,
I will try to answer your question. I definitely agree with your criticism of GIVING banks money. In fact, I think if you look into it you will see that Bush was reluctant too but eventually was convinced it was necessary.
One might consider bailouts (to big companies) and tax cuts (to big companies) as being equivalent, but there is an important difference. When you increase tax rates “on the rich” in actual fact you are not necessarily targeting the rich, you are specifically targeting the people who are earning the most profits (which isn’t exactly the same thing). So the very people who are being efficient, successful, generating wealth are the ones who we punish when we increase tax rates. My point is that I would rather invest in and reward these individuals and companies who are profitable realizing that their growth will create more wealth and more jobs than have an inefficient and politically motivated government take that money to try to do the same (or so that they can distribute that money to failing companies partially owned by the government).
I do agree with you about the bailouts though, particularly to banks and insurance companies. It’s a tough call when the economy is falling apart, but given hindsight I agree that all that bailout money was a waste because it basically went towards paying their liabilities for them, not to improve liquidity.
