Uncle Sam: Business Man

So the US (as well as the UK, Germany and other countries) is buying banks. And other financial businesses. And thousands of bad mortgages (translation: the homes themselves after the owners default). Plus billions in commercial paper. And we're making those dollars available to other countries on a "call in the next ten minutes" basis.

Welcome to Uncle Sam: The Mutual Fund.

There may indeed be very, very good reasons to do all of this. In fact, I know there are. Analyzing those reasons is not my purpose here, however.

From the 30,000 foot observation deck, where everything is plain as the nose on George Washington's Mt. Rushmore face, I see one big flaw with allowing the government to buy anything. They're lousy managers. They have no business sense. They've never been in the business of making a buck. Redistributing a buck, sure; raising a buck, check; wasting a buck, no doubt. And of course, the feds literally do MAKE bucks: the treasury department actually prints them. Earning them, though, is another matter.

There are a lot of very smart people in government. The fact that most of them are attorneys or economists aside, there is a lot of brain power occupying the seats of power. If IQs were dollars, we'd be settling our national debt with China tomorrow and throwing in a few spare billion just for the hell of it.

And we have alot of people in government who are good at knowing the national mood, cow towing to special interests, double talking, not saying what they mean, collecting money and getting voters to like them enough to stay in office. If grubbing for votes could be turned into capital -- well, capital that could be spent on something other than elections -- we could probably pay off Europe's collective national debt as well as our own.

But the guy who runs the successful family-run business in your city is not necessarily the smartest guy in the room, or the best educated. Successful bankers, God bless every last vice presidential one of them, lean more to being salesmen than academics. The best accountants might not know calculus but can add and subtract like no bodies business. A successful medical practice is usually due to the woman office manager with junior college credentials than the highly educated physicians performing the services.

Looked at another way, let's look where all the brain power has gotten us so far. That $700 billion bailout idea was so well thought out that our Einsteins in the House wouldn't vote for it until it was added to a $150 billion free-for-all package of pork. Put that under the heading of grubbing for votes.

And what about all those top level executives and investment hot shots who managed to steer their Wall Street firms straight into a wall. Those Ivy League educations didn't seem to do much good there, did they. Put that under what high IQ gets you.

So now all this government brain power will be owning the banks and insurance companies.

Can't wait.