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Last week I jumped on board with a tirade from CNBC commentator Rick Santelli. In short, Rick's rant threw a stiff jab at the Obama administration for throwing money at homeowners who weren't conservative and responsible with their home purchases.
There was a lot of reaction to what I wrote, and much of it seemed to suggest that one has to either be on the side of the corporatocracy that's stomping all over the little people or on the side of the evil socialists who are dead set on taking money from the rich and burning it in a massive anti-capitalism bonfire. I've gotta believe that I'm not the only one who falls in between the two.
But if I'm not picketing against socialism or shaking my fist at The Man, then what am I for? In short, I'm for smart policies that aren't ...
... Wasteful "help"
The primary reason that I am on board with Generalissimo Santelli when it comes to housing help is that I don't see the plan as a good use of government money. The housing market needs to find a new equilibrium and it's not going to do that while government cheese is getting baked into the pie. And that's not to mention the fact that the money is going to less responsible borrowers that are now counting on a refinancing to be able to keep their home.
Ben Bernanke recently addressed such concerns by suggesting that the situation is similar to calling the fire department when your neighbor sets his house on fire while smoking in bed. The idea is that your neighbor should be punished for smoking in bed, but you don't want to see your house go up in flames in the process.
While Professor Bernanke has a few more years of economic study under his belt than me, I'm still going to have to disagree with him. If my neighbor defaults, my house doesn't go up in flames, the construction will be just as sound as it ever was, and I'll continue to be able to live comfortably in it. After all, I was never depending on an inflated home value as a source of income.
... Allowing the big banks to ignore their problems
Banks all over the country are suffering as a result of the real estate decline and rising consumer credit defaults -- that's no secret. But many banks around the country -- take Stock Advisor pick Umpqua Holdings (Nasdaq: UMPQ ) or Bank of the Ozarks for example -- have stayed profitable and well capitalized even as times get tough.
There are two very glaring examples of banks that do not fall into this category. If you haven't already spat on the floor and uttered their names, I'm talking about Bank of America (NYSE: BAC ) and Citigroup (NYSE: C ) . The size and financial reach of these two banks is holding the country hostage as they limp along on Uncle Sam's crutch and keep their asset exposure all too opaque.
It's time for the government to stop handling these two with kid gloves.
... Putting an end to the health-care drain on consumers' bank accounts
Think the U.S. is a land of profligate spending where consumers run up massive amounts of debt buying big-screen TVs and fancy clothes? Think again. Spending on most consumer goods has stayed relatively in line with historical levels, except for one massive, glaring item -- health care.
Don't get me wrong, I think the folks at Pfizer (NYSE: PFE ) , Stryker (NYSE: SYK ) , and other major (and minor) health-care companies are doing great things for medicine, and they need to be rewarded for their work. But it gets harder and harder every year to argue that health-care costs haven't spiraled out of control. And what's worse is that we don't even have a lot to show for it -- though we spend the most on health care as a percentage of GDP of any country in the world, we don't break the top 40 when it comes to life expectancy.
But as for those creating jobs ...
And if I haven't made it clear already that I'm all for helping out the average Joe on the street, I'll go ahead and say it -- it's jobs, jobs, jobs that matter, and I think the government should be helping to create them. You see, the great thing about job creation is that it pumps money into the economy, it gives Joe a paying job that can help him pay his mortgage, and it can even help lay the groundwork for future industry leadership for the U.S.
Take, for example, the funding of a single solar cell manufacturing site. Not only do you end up employing workers directly to build the site and work in it when it's finished, but you help bolster companies like Fluor, U.S. Steel (NYSE: X ) , and Caterpillar (NYSE: CAT ) that might be involved in the design and construction of the project.
New alternative energy capacity and research could help bring down the cost of clean energy, making it more competitive with traditional sources. On top of that, we'd be helping to bolster the U.S.' position in a growing global industry. That certainly seems like a lot of birds to kill with that one stone.
One way and another
So, I'm not worried about our country careening into socialism, nor am I interested in giving Joe on the street everything he wants. There are some places where the invisible hand should be slapped aside and the government should step in, but at the same time, average Joe is going to need to be told to take his lumps in other places. Pitting socialism and capitalism head-to-head in a Bloodsport-style death match may make for exciting -- if not loud -- media coverage, but I think we're short-changing ourselves if we think that one dogmatic view or another needs to emerge victorious.
But of course that's just the take of one common Fool. What do you think?
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