Thursday, October 2, 2008
The most basic principle in medicine is summarized by the 2,000-year old saying coined by Hippocrates, the father of medicine: First, Do No Harm.
When a patient is wheeled into the hospital, the doctor has to make sure that any treatment doesn't make the patient worse. You want to make the patient better, if possible. But it doesn't really matter how wondrous the treatment sounds if it ends up killing the patient. In deciding between possible treatments, the fundamental first priniciple is that you don't want to do anything which will make the patient worse.
The "First, Do No Harm" principle applies at all times, even in the most urgent, life-and-death ER situations (ask any ER doctor).The treament proposed by doctors Paulson, Bernanke and company will not work to make the patient - the U.S. economy - better. (See this).
More importantly, it violates the most basic prinicipal of First, Do No Harm. For example:
- The director of the nonpartisan Congressional Budget Office (Peter R. Orszag) said the bailout could deepen the crisis
- The former head of the Fed's open market operation - the key Fed agency which has been loaning hundreds of billions of dollars to Wall Street companies and banks - was quoted in Bloomberg:
"Every time you tinker with this delicate system even small changes can create big ripples,'' said Dino Kos, former head of the New York Fed's open-market operations . . . "This is the impossible situation they are in. The risks are that the government's $700 billion purchase of assets disturbs markets even more.''
- The Dallas Federal Reserve Bank President (Richard Fisher) said the proposed bailout would plunge the U.S. government deeper into a fiscal abyss
- A highly-regarded economist (Michael Hudson) says that the bailout is a giveaway that will cause hyperinflation and dollar collapse
- Billionaire investor Jim Rogers says the bailout would prolong the financial crisis
- Congressman Ron Paul said that the bailout will probably make things worse
- And many other people have said the same thing.