Friday, October 10, 2008

OU Daily vs Boren

Last Friday, Oct 3rd, the staff of the University of Oklahoma's student newspaper, OUDaily, proved themselves to be better human beings than OU president David Boren by printing an editorial advocating against the bail-out. Boren was one of a number of Oklahoma "business leaders" who signed a statement begging Congress to vote for the bail-out.

Here is the students' editorial:
OUR VIEW: Dear representatives: Vote no on bailout
The Oklahoma Daily Editorial Board
Friday, October 3, 2008

Dear Reps. Fallin, Lucas and Sullivan:

You’ve taken a lot of heat over the past five days for voting against the bailout bill on Monday.

The president of our university e-mailed you and asked you to change your vote, and a group of Oklahoma business leaders released a statement Wednesday that called you out.

Now that it’s time for a statement of our own, we want to say: Vote no. Again.

The bailout represents a staggering violation of free-market principles.

In a true free-market economy, firms that engage in risky behavior suffer the consequences of their actions when investments go bad.

In this case, firms bought high-risk mortgage-backed securities tied to mortgages offered to individuals who probably shouldn’t have been buying those homes in the first place.

Now that people are defaulting on their loans, the institutions are watching the value of their assets shrink and some could be facing bankruptcy.

It’s never pretty to watch huge firms fail. But if the government bails out firms that are struggling now, it will undermine the idea that financial institutions must maintain responsible practices and take reasonable risks.

A bailout will not provide companies with any incentive to reform their policies and make better decisions in the future.

We understand that the failure of the bailout bill could send the economy into a recession.

But we think the dangers of recession have been overstated by our president and every other public figure who has invoked the memory of 1929 when talking about this crisis.

The Great Depression is famous because it was such a striking anomaly in the history of American recessions. According to economics experts, most recessions last a few quarters at most.

While a year or so of recession might make life difficult for those in certain industries, it won’t usher in a second era of soup kitchens and bread lines.

Oklahoma, with its firm grip on the oil and gas industry, might not even feel a national recession. And it almost certainly wouldn’t find its education, health and safety programs threatened, as the Oklahoma CEOs who released a statement earlier this week would have you believe.

A recession might be just the thing the country needs anyway. It won’t be pretty, but some economic pain might compel Americans to stop living beyond their means and force firms to stop making it so easy to do so.

We appreciate your stand against unjust federal intervention into the economy. We hope that when you have the opportunity to vote today, you cast another vote against the bailout and for fiscal responsibility on the part of this nation’s financial institutions.


The editorial board of The Oklahoma Daily
You can read Boren's response to this editorial here.

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