The biggest difference between “bailout” and “financial relief” is mostly semantics. But with the U.S. government coming to the rescue of insurance companies, the sub-prime market, financial markets and the auto industry, it may be time for a whole new discussion on the political front for this country.

Certainly, the U.S. capital markets were in trouble. Few people would argue that we could afford to just sit back and do nothing. At the same time, few would argue that these kinds of handouts wouldn't be coming so readily if it wasn't an election year.

Sen. John McCain has added home mortgages to the list, and the airline industry has already began its lobbying efforts, indicating it is angling for a bailout, as well. Once it gets started, the next question is where will this cycle end?

Virtually everyone has been affected by higher energy prices and the troubles on Wall Street. If you are going to bail out X, Y and Z, what about A through W? This country seems to be operating on irrational fear and history tells us these type of overreactions make the peaks higher and the troughs lower than they would otherwise have been.

Very few are demanding answers to the question of what caused this problem in the first place. The Bush policy of essentially promoting a weak dollar and not taking steps to bolster it certainly contributed, but the overall economy, while weak, was still growing prior to the collapse in the subprime market. Unemployment was creeping up, but was still below historical norms. Meanwhile, despite the explosion in commodity prices (largely energy and grains due to the weak dollar, growing global demand, and federal subsidization of biofuels) that led to decreased discretionary dollars, the consumer was still purchasing.

So what caused the subprime crisis? A real estate bubble fed by the foolish expectation that housing could only go one direction, and lending policies that encouraged – essentially demanded by the federal government – and allowed people to buy houses they couldn't afford with the belief that equity appreciation would take care of it.

But before we get too judgmental in this regard, the belief that land appreciation will never cease has been the driver behind ag land for quite some time. While it can be argued that God isn’t making any more land, the same can't be said for office space or housing; we overbuilt and the market corrected.

This happens in industries and markets all the time. While the banks, insurance companies and financial institutions would have been pinched, they could have survived this storm. The real issue came when the government imposed accounting standards that insisted on adjusting asset values to market prices.

The formula used ended up reflecting a few fire sales when the market got tight, and banks on perfectly good loans were forced to write down their asset values by as much as 80%. This paper transaction had the effect of causing banks to write down their assets by roughly $500 billion. Since a bank essentially loans out $10 for every $1 in reserve, it had the effect of sucking $5 trillion out of the capital markets, and the liquidity of the capital markets was dealt a crippling blow.

While conspiracy theorists could have a heyday with this scenario, I personally have found that when it comes to governmental interference in the marketplace, politicians are, more times than not, guilty of incompetence rather than conscious efforts. However, I do believe that is no longer hyperbole if one wants to make the case that our country is now making long-term decisions that may determine whether we are ultimately a socialistic or capitalistic economy.

We thought the war between socialism and capitalism had been decided with the domination of the 20th century by capitalistic economies and the collapse of socialism around the world. But, today, the U.S. government is essentially in charge of the subprime credit market, and wields the powerful weapon of monetary policy, as well. It is taking ownership stakes in some of our largest financial and insurance companies. Now here come the auto, airline and mortgage industries lining up.

The U.S. Supreme Court decision in 2005 on Kelo vs. City of New London essentially destroyed the concept of private property rights (the foundation to any capitalistic economy) in this country. It essentially stated that your property is only your property until the government decides they would like somebody else to have it or they want it.

We have presidential candidates who feel more comfortable villainizing business leaders than leaders of foreign states who have sworn our demise. They employ class warfare and deem free enterprise and business as a necessary evil at best, and advocate the nationalization of another huge segment of our economy in terms of health care. They also talk of massive changes in the redistribution of wealth as merely being “fairness.”

I don’t see how anyone can fairly characterize these changes as anything but a rejection of free markets, entrepreneurship, free enterprise and capitalism.

I didn't know how bad it had gotten until I was watching a U.S. Senate debate on TV, and went off on one of my diatribes to my beloved wife (she still pretends to listen occasionally). She stopped me and said I had to stop using the word "capitalism," like it some sort of ideal or a good thing.

In today's world, it’s not seen as that; it’s seen as risk, as creating losers, as enlarging the difference between the middle class and the ultra-wealthy, and as an outdated relic of an unenlightened populace. Capitalism is viewed as something we need to protect ourselves from, not aspire to.

Capitalism sends jobs overseas, makes you work 60-hour work weeks, and provides the constant fear that you may be out of a job tomorrow.

I had to concede she was largely right. History also illustrates that socialism, once it becomes the dominant force in a society, doesn't relinquish control easily; it has to implode or its leaders thrown out. The communist revolutions of past decades implemented socialism by force and in one fell swoop.

Yet, when one looks across the spectrum of the world’s developed countries, the growth of socialism has been one of incrementalism. The goal is to gradually undermine the underpinnings of free enterprise to the point nobody can imagine the government without a vital omnipresent role in our lives. And we need look no further than ag policy to see how this policy plays out.

Will America stop before it reaches the tipping point? Or will we move beyond the point of no return without even considering and debating the choice we are making?
-- Troy Marshall