The Minnesota Grizzly Bear

Roaring about life since 2009

‘cash for failing businesses,’ redux

You’d think that the best move for an entity straddled with as much debt as the United States would be to develop financial responsiblity, watch its spending habits,  and cut back on unnecessary expenditures. 

Enter the world of Obama:

Lennar (LEN), the Miami-based homebuilder that has been gushing red ink since its misguided bets on house prices went bad three years ago, on Thursday posted its first quarterly profit since 2007

But don’t congratulate Miller. The entire profit — and then some — came straight from taxpayers’ pockets.

The real driver of Lennar’s rebound, as the company acknowledged Thursday, was a $353 million tax gain that stems from a bit of congressional largesse in November.

Handsome government handout for homebuilders

Pumping money into these failing companies whether through straight-up bailouts or tax rebates is the last thing we should be doing.  It is rewarding them for their failure and irresponsibility and unfairly distorting the free market in potentially destructive ways.

I can see theoretically why the Dems think this is a good idea;  just like in every debate there are at least two sides or points of view.  The thing is in this case, the Democrats and all the other Keynesian economists are simply wrong when it comes to their beliefs in government intervention in the economy and the markets, for so many reasons that it just staggers the mind. 

Have it good,



January 7, 2010 - Posted by | Uncategorized | , , ,


  1. Agreed, the logic of flooding money into a failed enterprise to create a temporary job makes no sense.

    Comment by slamdunk | January 7, 2010 | Reply

  2. I know, I just don’t get it. When I was in high school I actually tried to argue with my Economics teacher about Keynes and he just shut down into hilarious knee-jerk responses which amounted to basically “because I said so.”

    So if government intervention can grow the economy, why not let the government tax us 100% in order to spend 100% on the economy? How prosperous would we be then, sounds pretty ridiculous doesn’t it?


    Comment by Minnesota Grizzly Bear | January 7, 2010 | Reply

  3. You know what I think when I see this? It’s making my wish to invest in rental houses more costly. It’s also making it more difficult for families to afford housing. If the market wasn’t being propped up like this, prices would lower much more and reach a point where people would start buying again.

    But they want their cake and eat it too. They want high prices and buyers too.

    It really doesn’t make sense.

    Comment by Mr. Anon | January 9, 2010 | Reply

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