President Obama’s speech last night – awesome delivery, the man sure can talk us up proud. And with Nancy and ol’ Joe sitting behind him, I had a feeling similar to what the liberals must have felt when W was at the podium with VP Cheney and Speaker Hastert bringing up the rear. I guess we all take our turn in the barrel. The message I heard was ‘Don’t worry, be happy, and my fellow Americans, if you’re going to be stupid wholesale, then your government will (make the prudent ones) bail you out.’
The 21feb09 Economist (‘World’s oldest newspaper’) is headlining the global “collapse of manufacturing” and documenting that we have not seen such contraction since the 1970s. Meanwhile our benighted electorate agrees with the populist demagoguery asking why should Wall Street (aka financial institutions) be bailed out and not also Main Street. The Economist explains the fundamental importance of freely flowing finances to a healthy economy while warning that “sectoral aid (e.g. manufacturing) is wasteful”. Bottom line, not all of us should be stretching out our hands if the overall economy is to heal itself sooner than later.
Glassman and Nolan have a good idea (25feb09 WSJ ‘Bankers Need More Skin in the Game’) about restructuring the banking system – smaller banks that are partnerships instead of big corporations. Partners aren’t protected by the ‘corporate veil’ and therefore will be more careful with the bets they make, even if it’s with your money. Worth pondering before we write two more tons of regulations and hire added government legions in an attempt to enforce them. Years ago Garrett Hardin gave an example of how good and minimal governance would work in the enforcement of environmental standards for the Mississippi River. All riveside cities take in their drinking water upstream and dump their supposedly cleaned up waste water downstream. Most of them didn’t do a good job cleaning up, and the monitoring and testing of each city’s discharge was expensive and faulty. St. Louis dumped dirty water back into the river which the folks in Vicksburg had a doubly hard time cleaning up before they could drink it. Hardin proposed that the government simply pass a law that said all such cities intake their drinking water downstream of their location, and discharge their cleaned water upstream of their location. Hmmm.
The amnesty bill (S1639) of 2007 was an atrocity that did harm to the cardio-vascular systems of many Americans who heard about it. If yours can still take the strain, then watch this CNN Lou Dobbs video. Does anyone know whether there is a stealthy resurrection of this piece of …, this piece of …, well OK, this piece of legislation being contemplated in Congress?
[update] A correspondent sent a revealing 30sep99 NY Times report that contributes to the debate on the origins of the current financial mess with the note - "In case you ever wondered who to believe on this topic, and how it all started, here it is in black and white." Download NYTimes1999