Maybe we SHOULD BAILOUT everyone!

Everyone is arguing about whether and how to bail out the auto industry. What is so frustrating is that neither the Republicans, the Democrats, nor the Financial Titans are giving even a casual thought to the American People! And the media is standing by with nothing more than cluelessness on their faces.

What do I mean by this? Well, this used to be a country premised on the idea that its wealth was built by millions of individuals each making economically intelligent decisions. The collective of those decisions, without the massive burden of mis-regulation, generated the billions of micro-decisions that forced the most economic path to industry and prosperity. These billions of micro-decisions, not centralized mis-regulations, created the optimum valued automobiles, trains, planes, chemical factories, and computers. Forty years of regulations and sham-de-regulations slowly unwound the great infrastructure created by our fathers.

With recent years of socialist-style education and half-baked regulations, economic risk was concentrated into an obscure area of the financial-insurance industrial complex. Now that all that economic risk collapsed us, at least on paper, everyone wants to throw out our basic form of economic governance -- our principle of individual micro-decisions -- in favor of socialist-style takeover of what remains of the free market.

Even if you do not agree with my interpretation of our recent economic history, it is still worth hearing my thoughts to regain our one global competitive advantage -- to not destroy our ability to individually "vote" as a collective in the economic world.

It seems to me that we have a Social Security Administration that has been completely silent during a crisis that is nothing short than the very heart and essence of what social security is all about. Further, for at least a decade, we have been debating how to finance the future of Social Security. If we are going to bail out any industry in exchange for an equity position, it seems that Social Security should be the one doing it!

If Social Security were given the $700 Billion, or $1 or $2 Trillion, then we can empower each and every citizen to choose which companies to bail out. For example, Ford or GM can be allowed to advertise that the are offering Treasury Shares through the Social Security Administration at some set price. Citizens can log in or phone an automated system to "buy" those shares from their portion.

To protect individuals from bad choices, one half of all the purchases are pooled, so that half of any individual's fund represents the collective decision of all and one half represents their individual choices.

If a company is worthy of the trust of the citizenry, then they will raise the additional capital they need. With time, the success of American business will grow the wealth of their Social Security accounts.

In this way, we don't have to have Congress pick and choose who gets a bailout and who doesn't. With a 10-15% approval rating, why in the world would we want them making such decisions, anyway?! Here, the people can choose who is worthy, whether it is a smaller industry with a plant in their town, or a big automotive corporation. The billions of mico-decisions will determine the best investments for the $700 Billion to $2 Trillion that is currently needed.

This method will also instill a greater dedication to American business by the citizens and will also, over time, guide American businesses to make corporate decisions that are more in line with the welfare of Americans.

Thus, we turn this current financial crisis into a shining opportunity for America. We turn a rank socialist event into one that celebrates capitalism in a way that spreads the wealth for everyone. In a way, this is the time for America to coin a new economic philosophy -- maybe we can call it "social capitalism" -- where we use socialist concepts to make capitalism work for all classes in our society.

One final comment. We have the same factories today that we had in July 2008, before the economic collapse. The same miles of highways, houses, cars, planes. No army or terrorist came in and destroyed what we have. In fact, our energy costs are a small fraction today over that of July 2008. Our economic woes are borne on paper, based on a complex set of rules and regualtions. Our true wealth is just the same today as it was before the crisis. Don't let them make you lose sight of that.

So, maybe WE SHOULD BAILOUT EVERYONE. At least, put those decisions back with the people.

(c) 2008 Knobloch. All rights reserved. Contact for publication permission. http://www.charlesknobloch.blogspot.com/