Politically Incorrect.

Last night, my wife wanted to watch 20/20 on ABC because she enjoys the fact that John Stossel is somewhat of a contrarian, not afraid to take shots at anyone including himself. What we got last night was a broadside of Libertarian views on the ineffectiveness of government and the suggestion that the problems we face are more often caused by over-regulation than under-regulation of the free choice of our population. The term that he used was "self-ordering". Then, I got a surprise when he started to talk about New Orleans in the aftermath of Katrina.


Stossel interviewed a number of people with great attention being paid to Mayor Nagin and the bureaucracy that keeps people from doing simple things... form after form, arcane regulations to be followed to the letter. He contrasted that with the volunteer operations that have done much more than all of the expensive public works. His major examples came from Habitat for Humanity, and Malik Rahim. In fact, Rahim got a lot more camera time than Brad Pitt (Make it Right Campaign) and that says a lot. It is unfortunate that the segment did not mentions Rahim's current candidacy.

I don't agree with Stossel's purely Libertarian view that over-regulation by government is what caused the mess. Actually, in his view, Fannie Mae and Fredie Mac should never have existed in the first place. It makes just as much sense to blame the Harvard MBA programs for teaching all of those financial whiz kids that risk is only a mathematical calculation. The problems were not that government over-regulated, but that they did not regulate the right things. The basic idea that you could commodify financial obligations (mortgages) left no room for the type of failure that happened as real estate prices dropped.

The more scary proposition for me is that banks have hugely more debt obligation in terms of credit cards. When people are using credit card debt to last from pay check to pay check, and their costs are continuing to rise, we have another bubble ready to burst and that is one which will make the real estate fiasco look like a parlor game.

Bailout? How about a bootstrap?

Van Jones's new book is now available. The Green Collar Economy is getting a lot of good press. It is (as of 10 minutes ago)#27 in sales at Amazon. If you don't know Jones, have not heard of his green economy pitch, he has a great introduction on YouTube with an alternative to the $700 Billion bailout. Made sense to me.

Those who say no.

When I read or listen to all of the verbiage that is floating around concerning the financial straight that the Bush Administration has put us in, I feel very much like I am still listening a broken phonograph disc, repeating the same word over and over. No matter which side of the "bailout" question I am listening to, it is almost without exception based on grabbing a single concept, extrapolating that to being the cause for everything and then suggesting that there is only one answer.

It ain't that simple, folks, as I will try to explain after the the jump.


The anti-capitalist left views the entire fiasco as a way to get the average taxpayer to pay for the mistakes of the capitalist goons who cause it and floated away on their golden parachutes.

Then, there is the argument, made by some who would say "yes" to the bailout, that some of these companies are just too big to fail. That leads to further assumptions such as enforcing a greater degree monopoly protection, or breaking up the big institutions. The results of that would probably be the same as what we got by breaking up AT&T. It will not be what the proponents claim.

Personally, this does not affect me as much as it will affect many. I don't really need to assets in my 401-K and they are in a well balanced group of stocks.

However, I grew up with parents who were forever impacted by the Great Depression. My father owned a small town grocery and lost it because he could not get the credit to buy new stock and his customers, to whom he had allowed credit, could not pay.

We see that happening already in this case, affecting mainly small businesses. NPR had a story on this AM about a small machine shop that had one of their best customer's cancel all orders. The company owner said that he even drove over to the customer's plant to count the cars in the parking lot and verify that they were still in business.

There are members of Congress who are absolutely scared of being responsible for the next Great Depression having lived through the last. I don't blame them. I am old enough to have observed the results. I don't think that most Greens are or they might be more circumspect in their rhetoric on the "no bailout" side.

There are multiple options as to what we should be doing. Maybe we need to take a bit more time than the market is comfortable with. Again, I would blame Bush and Paulsen for that. The rhetoric that they used set up expectations that could never be met.

The real issue is the fact that we have an economic expectation of perpetual growth. The facts are that, while population may continue to grow, the resources of this planet are finite. Greens should arguing for a conversion of our economy requiring growth to succeed into one based on the idea of sustainability. That is a word that seems to have been lost from our political discourse. It needs to be re-introduced to the American Public.

Bail out at 10,000

I tend to be a contrarian when it comes to politics. As for politicians, I am a pessimist and rarely pleasantly surprised. But there is a long list of things that most commentators are not talking about.


I did appreciate the analysis of the House vote offered by Chuck Todd on NBC's Nightly News.
According to Todd,the yes no vote depended on whether the Representative was in a close race, or had one recently. Those is safe districts voted aye. Those facing a challenge listened to their constituency's fears and voted "nae".

Beyond that, if there was a failure of leadership here, I think that started with Nancy Pelosi who could not make up her mind whether to blame everything on the Republicans for the last 50 years, or to urge more bi-partisan work. As usual, her timing was terrible. Cindy Sheehan should be all over this as it is a great opportunity to trash Pelosi.

I don't know whether having Nader in town helps or hurts on that question. He will also trash the plan but the focus will be on Ralph, not Cindy.

Almost every staffer in Washington in working double overtime trying to protect their bosses backside.

When I heard the Republican plan for an mortgage insurance.

House Republicans negotiated a section into the bill that would establish an insurance program for toxic assets. Instead of selling troubled mortgage-backed securities to the Treasury, banks could instead purchase insurance from the Treasury on the assets.

That still leaves the situation without regulation and the lack of regulation is very much what got us into this mess. What makes them think that the industry that found creative ways to leverage the risk will show any more risk aversion with an insurance policy to bail them out. That is even worse than the Paulsen plan.

With all of the fear and uncertainty in the market, someone should be asking the House Republicans, beginning with Mike Pence (IN), what they think about privatizing Social Security. That never made sense to me, even though the long range track of such assets is upward, life circumstances happen when they happen and don't ask permission from the market first. It was a fraud when it was suggested and it is clearly not something that they want to talk about now.

Thanks to Dave Roberts at Grist, I got around to reading Chalmers Johnson at The Nation. It is not normally on my reading list, but this is one of the best commentaries that I have read.

Spending hundreds of billions of dollars on present and future wars that have nothing to do with our national security is simply obscene. And yet Congress has been corrupted by the military-industrial complex into believing that by voting for more defense spending, they are supplying "jobs" for the economy. In fact, they are only diverting scarce resources from the desperately needed rebuilding of the American infrastructure and other crucial spending necessities into utterly wasteful munitions. If we cannot cut back our long-standing, ever-increasing military spending in a major way, then the bankruptcy of the United States is inevitable. As the current Wall Street meltdown has demonstrated, that is no longer an abstract possibility but a growing likelihood. We do not have much time left.

One last thought. My wife was talking to one of her old college friends today. Her friend does not pay much attention to the news. When Rumiko mentioned that the stock market was down 777 points yesterday, that caught her friends attention. "That's terrible. All of my income is from dividends and interest." When anti-capitalist leftist talk about the scuttling the bailout, they need, at the same time, to say exactly what they will do with all of the 401-K plans, the corporate and union pension funds, that just lost as much money as the bailout will cost. That is our money, some of it is my money, and I would hate to see it disappear for lack of intelligent action.