Author ArchiveBanks are not using the Fed bailout money to ease the tight credit market. They are using it to shore up their balance sheets and consider acquisitions of weaker banks who were perhaps not able to get as much bailout money. It is simply making the concept of “too big to fail” even worse since in this scenario the big will get bigger.
To the matter of “easing the tight credit market”….I have a comment: How can more of the disease be the cure? If overly lax lending and inability to accurately assess the risk of debt led to the crisis, how can more debt and “easing the credit market” (aka more lending) fix it? Its just doing more of the same thing….you can package it as a rescue if you like…it doesn’t change the fact that you can’t lend your way out of a crisis that was created by lending.
This is how capitalism works: Bad investments fail, the capital is liquidated, and re-allocated to more fit industries and companies. It is so two-faced to talk about the virtues of the free market with one breath while preventing it from working with another.
Why can’t banks fail? Because banks issue money. In a fractional banking system when banks lend, they create money. It goes back to a crisis of faith in our fiat money. If the issuers of the money fail….then the money itself might fail. If the money fails, the government fails. That’s why its tricky to let banks fail. It is a matter of national self-interest (besides the army of lobbyist I’m sure the banking industry has).
What about General Motors? Is the government going to let them fail? They’ve been hemorrhaging money for years and keep asking for bailouts. The answer is NO. The government may allow some small part of the auto industry to fail, but in general, they will not allow the inefficient US automakers to fold. It is a matter of national self-interest. The government wants cars manufactured in the US because in case of a war the auto industry might need to be conscripted to make weapons (as was done in WWI and WWII) or ramped up to fill a void in the absence of car imports if we’re at war with say China (where presumably Japanese cars could no longer be imported). It is why the government continues to subsidize the farm industry in the US (when it clearly can’t compete with cheap imports from 3rd world countries). If we are a war, we need to be able to produce our own food in the absence of imports.
I also want to comment on the red and blue states and the election results. A map of the states that voted Republican also fairly closely matches a map of states with the worst poverty and most income inequality…exactly the issues the Democrats try to deal with. Why is it that those who stand to gain most from the Democrats being in office vote against them? It doesn’t make sense. The Republican states are also generally less educated, with less health care coverage, and lose more jobs to free-trade agreements. The Democrats also try to deal with those issues. I truly don’t understand. Is gay marriage, handguns, and abortion policy really THAT important to the poor?
Finally, I want to re-comment on Economics, the dismal science. It has been shown even more dismal than imagined over the past few months. Why is it, with all the economists in the world, that so few predicted the current crisis? If economics is a science, it should’ve done better. If it is a science then it should have something more prescriptive to say in terms of actions to take to remedy the crisis. Instead Bernake and Paulson were able to blank check the banking industry…allowing them to do whatever they want with essentially as much money as they want….and call it the “best” plan of action to avert the crisis. “Best” based on what? Economics. Now that is dismal.
Tags: economics I went home for the weekend and saw some old friends. Jason had a party at his new house. I hadn’t seen most of those people since college or a little after. Everyone is always the same mostly, except a little heavier, a little more wrinkled, a little less willing to get piss drunk (myself included). I talked a lot about people’s kids and their marriage. I liked it for the most part. I wore a Halloween costume I last wore in graduate school in 2001 I think. Its a pimp outfit with leather pants, a white fedora, and a really tight shiny shirt. Its ridiculous but fun. I was still able to get into the pants, but I couldn’t button the shirt anymore…not even close. In fact, I wonder how I ever got into it. Jason seemed good. Its strange that so many of my friends are divorced now. Actually, I guess its just two of them that are…but hey, how many close friends can someone have? Two is actually a large percentage. The next night I went to see Josh after shopping all day with my mom. I bought this really cool piece of furniture that I don’t really need. I’m going to use it as a TV stand because I can’t figure out any other place to put it. Anyway, Josh was good. His kids are super cute. He was really drunk by the time I got there at 7 having watched the Clemson game. You know he’s drunk when he starts talking about how good we were at basketball. I admit its a fun conversation, since we were pretty good…but let’s face it: I couldn’t throw a basketball in the ocean now…and if I could I’d probably hurt my back doing it. I used to swear up and down I’d never have the “used to be” conversation, but now that I’m older I see why people have it. Its like a fish story…it gets better every time you tell it. You can forget the defeats and remember the victories…embellish here and there. No one remembers the score anyway, right? I did dunk on someone in a game one time though. That’s true: Wes Jackson, I remember. (Ok, the goal was about 2 inches short of 10 feet, but that’s just a detail to forget next time I tell the story). Anyway, its weird to go home sometimes and think about all that stuff. Honestly it seems like it all happened to another person. Traveling sort of cut my life in half, and the first half is pretty distant sometimes….especially 10 beers in. I guess I’m thinking about all this today because I went home for the weekend and got a message from some folks on Facebook today that made me think about some things I haven’t thought about in years. We’ll see just how smart the neo-cons are come election day. History/Macro trends are on the side of the Democrats in this election. The polls have them in the lead. The Republicans just completely f%*ked up the last 8 years. The Democrats would be hard pressed to lose this election, and the Republican party leadership knows that. I am beginning to think the McCain/Palin ticket was never meant to be put to a vote. She’s obviously in over her head. She is not qualified to be vice president. She governed a small town in Alaska and then has been state governor for a bit (without significant distinguishing successes). That’s like me playing flag football on Saturdays poorly, and someone suddenly asking me to be starting quarterback for the Cowboys. It just doesn’t make sense. Add on top of that McCain’s age….statistically he stands a good chance of dying in office. Then Palin is president. Surely the Republicans can’t be serious? I think they’re going to bring out a dark horse vice presidential candidate at the last second. Palin will have to step away from the nomination for some reason, and they’ll put forward someone else. The Republicans got a bounce in the polls when they nominated Palin (which is natural; its new, exciting, etc.)…and then when she was vetted the poll numbers dropped (since she is woefully unqualified). If the neo-cons could put forward someone else, and not give voters time to vet him/her, the bounce might be enough to help McCain get elected. How would that work logistically, you ask? How would McCain have any credibility if he selected Palin, then unselected her? Surely that wouldn’t work? Well, I can think of one way: McCain is billing himself (rightly or wrongly) as a maverick. He is the anti-Republican Republican in a political/economic environment where being Republican isn’t that popular. As a maverick he can say he was pressured to select Palin, and now he’s breaking free of that pressure to give America what it needs in this time of crisis. And who will his new VP pick be? I think the correct play would be a conservative Democrat (perhaps Joe Lieberman). Democrats and Republicans together on the same ticket; the reform and bi-partisanship America needs. Its not a bad idea. Think a play like that is too bold/rash? Perhaps, but the Republicans are very likely going to lose this election and they know it. They’ve got little to lose by doing something different. If Americans want to elect a Democrat…give them one…on the Republican ticket. If you can’t beat ’em, join ’em. Just a thought. If I can think of doing it…so can they. I had a consulting gig for work recently and got to see some pretty amazing sports memorabilia at a certain large sports apparel company’s headquarters. This covered the entire wall. Bottom line: I loved Jordan. He made basketball look good. He achieved a greatness we all aspire to yet never reach…it transcended sport even. He was just fucking good….period. See that look on his face. It says, “Go home. I’ve already won.” I think about that as I watched the Vice Presidential debates tonight. Politicians just pander back and forth; you never really know if what they are saying is true. They leave and go do whatever they were going to do in the first place, probably something that’s going to screw us and has exactly the opposite effect they claim it will have. But Jordan….no need to talk. No pandering. The score speaks for itself. RESULTS. You can believe in that. You know its real. He just hit that shot over Craig Ehlo. That…just…happened. So many people have contacted me through Facebook lately. Its strange to relive some of that; sometimes to be forced to. Tessa wrote me recently. I lived with her for a bit at Ein Gedi…in 1997 I think it was. Here is what she said:
My response:
Oh well. I think I’ll go back to my wine and Monday nights on HDNet. ……………………….To understand me, you must understand this. Tags: Israel, travelThe last month hasn’t been the best. I’ve been working at least one day each weekend and 60+ hours each week; I’ve been back and forth to the West coast twice. I have early morning calls with India and evening calls with the West coast. I’m just tired. I have work on my house I have to do, but I can’t get time. I have to stain my deck, put up a light, pressure wash the side of my house, and paint my shutters. I’ve talked about all this before; in fact…..the feeling that I go from one thing to the next, never resting….probably describes most of the US. I should stop complaining. Regardless, it is bad for your health. Stress isn’t so bad, but long hours, a lack of exercise, and spotty sleep do take their toll…especially lack of exercise. I don’t have time to play tennis; those two hours in the evening I used for exercise are now taken up by work or chores or whatever. On another note, I went to see the Indigo Girls in concert last night. They are really one of my favorite bands, and I’m happy to report they are simply awesome in concert….perfect. Its amazing that so much sound can come from two guitars and two voices. I loved it. Hopefully in the next few weeks things will return to normal…whatever that is. People have an amazing capacity to suspend logic while maintaining that life makes sense. Sundays for instance. All week everyone requires proof….receipts, contracts, documentation, follow ups, passwords, meetings, blah, blah, blah….but then on Sunday they go to Church and praise somebody that is plainly not there. They sing songs about the justice, love, and compassion while ignoring the death, disease, war, destruction and plain bad luck that makes up most people’s lives. I’m not saying they’re wrong on Sundays…..I’m just saying it doesn’t make sense. Which brings me to my first point: There is no superfood that will keep you young. All these people are drinking 40 dollar concentrated acai juice, eating wild salmon for omega-3s, touting blueberries, and free-range beef or whatever. It doesn’t help. How do I know? Japanese women are the longest lived group on the planet at slightly over 85 years. Vilcabamba Valley in Ecuador is said to be the healthiest environment on the planet with people regularly living over 100. Barbados (along with Japan) boasts the most Centenarians per capita. What do these places have in common? Honestly, other than perhaps generally healthy lifestyles and maybe a diet rich in seafood…..nothing. The point isn’t that something isn’t making them live longer…its that Japanese women at 85 are not THAT much different than the USA at 77. If there were some lifestyle/diet change that would make us live significantly longer, someone would’ve adopted it, and it would be so apparent that soon everyone would be doing it, and then we’d be back to the same situation: Everyone living approximately the same life span. In fact, there WERE lifestyle/diet changes that made people healthier and presumably live longer. We are the descendants of those people. In short, if you like the amazonian fruits, eat them. But they aren’t going to make you live longer. If they did, the jungle people eating them naturally would have abnormally long life spans. They don’t. They die sooner than we do. Next point: ESP. It doesn’t exist. Not in anyone. You know why? Easy. It would be SO advantageous to be able to know other people’s thoughts or tell the future or any other ESP-like skill, that whoever had the skill would get so rich and bang so many women, that their descendents would soon outnumber everyone else…..then everyone would have ESP. The fact that everyone doesn’t have ESP strongly suggests that it doesn’t exist. So…go to church, drink Acai juice, and try to bend spoons….it can’t hurt. You never know these days. Tags: biology
Aug
05
2008
Cynical, overly nostalgic, temperamental, and hard to please.Posted by: kellio in UncategorizedI started writing something, but I lost patience to finish it. Its filed with all my other unpublished posts that will likely never get done. It was about routine. Adutlhood is about routine. It consumes my life. It was about acceptance of average, simply because at any given moment you are likely to be doing something you commonly do. In other words, your life, by statistical inevitability, is made up of average things. It was about fear of the future and longing for the past, even though the past was not always that great, and the future is likely going to be better. It was probably leading toward the sobering realization that no matter what you do, there you are. I am by nature a cynic, overly nostalgic, temperamental, and hard to please. This post seems also to be about all those things too, but in less detail….because I’m impatient….and tired. This weekend my tennis team is playing in the ALTA city championships. I’ve been runner up before, but never won. We’ll see….not that it will give me any lasting pleasure if we win. That’s what this whole post, and the one before it that I never finished, is about. |





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