Tuesday, September 30, 2008

A Few More Simple Questions

Last Friday my post was titled A Few Simple Questions, and - as the title implies - it posed a few simple questions about the current economic mess and the accompanying attempts to "rescue" the economy. Today, I have a few more simple questions for the financial 500-pound brains who brought us to this point:

1. This one actually comes from my friend and commenter Katherine, who in a comment on yesterday's post wrote: "I also am not seeing the dire "no credit available" warnings that are being batted about. Why do I keep getting offers for more credit cards and un-asked-for increases to my credit line?" Why indeed? This question is so simple and obvious that I'm surprised I didn't think of it. For months, as the economy has imploded and credit supposedly has vanished, there has not been a single day on which we have not received unsolicited offers for new credit cards. Where is this credit coming from? Hmmm...

2. The major factor in the collapse of the economy is said to be the large number of "subprime mortgages" - those issued by unscrupulous lenders to dumb people, then bundled together as exotic financial instruments and sold to credulous investors looking for a fast buck. Okay, I can accept that. I guess. But how many of these bad mortgages must have been issued to sink the world's largest economy? What percentage of the mortgage market had to be toxic to cause a problem this vast and all-encompassing?

3. Why do we allow Congress to pass well-intentioned, yet stupid laws like The Community Reinvestment Act of 1977, which encouraged lenders to provide mortgage loans to people who otherwise couldn't afford them? It seems that if anything contributed to the development of the subprime mess and the burgeoning number of foreclosures, it's this. Note to those designing the "economic rescue plan" - don't rescue people who took out mortgages no sane person would have wanted and no sane lender would have approved in the first place.

Just a few more simple questions for our "leadership." Not that I expect any straight answers, of course.

What I expect is more clouds of partisan, finger-pointing, politically theatrical hot air coming from Capitol Hill.

I don't think I'll be disappointed. In the words of the late Jerry Reed in his classic song The Crude Oil Blues: "...he who expected nothin' ain't gonna be deceived."

Have a good day. More thoughts tomorrow.


Monday, September 29, 2008

"The Emergency Economic Stabilization Act of 2008"

Only one more day to go in September, and 40 days until Agnes and I leave for our long-anticipated vacation. I'm just hoping we get there before my head explodes from frustration about current events or Agnes decides to do something to some idiot (other than me) that attracts the attention of the coroner. Keep your fingers crossed.

Agnes's parents return home this afternoon. They've spent the last two weeks with us getting their great-grandchild fix with Leya and forcing me learn all sorts of new things...such as (courtesy of technically adept son-in-law Vin) how to locate streaming German TV on the internet, then connect the laptop to the big screen television for a wider variety of entertainment than the measly three channels of German TV for which I'm paying Dish Network through the nose. Sigh.

And so our lives and schedules will return to normal, or whatever passes for normal here. The local commuter bus drivers are still on strike, so my commute will remain longer and more expensive than usual, which is okay, because it just helps stoke my general curmudgeonly rage over my favorite topic...the economic bailout plan.

You didn't think I'd go a day without fulminating about that, did you?

The draft of "The Emergency Economic Stabilization Act of 2008" was released yesterday...all 110 pages of it. You can download and read it here, and this CNN article gives an overview of its key provisions. As with most legislation, it's written in dense language, and makes frequent reference to other laws and documents to which the casual reader is unlikely to have ready access. Here are my thoughts...

Yesterday, I reported on my daughter's rage over proposals she'd heard about bailing out homeowners who had taken out mortgages they couldn't afford. Here's what the bill says on page 28, in Section 111a(2)(B):

"MODIFICATIONS. In the case of a residential mortgage loan, modifications made under paragraph (1) may include: (A) reduction in interest rates; (B) reduction of loan principal; and (C) other similar modifications."

The key words here are "reduction of loan principal." If, as my daughter raged yesterday, people facing foreclosure are allowed to refinance a lower principal amount, this provision is grossly unfair to those who responsibly bought houses they could actually afford.

I also noted yesterday my consternation about provisions for an oversight board staffed by the same people whose lack of foresight and oversight contributed to the economic meltdown in the first place. Well, it's true. Section 104 of the bill establishes a "Financial Stability Oversight Board" whose membership includes the Fed Chairman, the Secretary of the Treasury, the Director of the Federal Home Finance Agency, the Chairman of the Securities and Exchange Commission, and the Secretary of Housing and Urban Development. Section 125 of the bill also establishes a 5-person Congressional Oversight Panel which may procure the "temporary and intermittent services" of "experts and consultants" (section 125(d)(2)). I think it will be very important to keep an eye on who is appointed to the Oversight Board, and who that board hires as its experts and consultants...images of foxes guarding henhouses come to mind.

Of course, opinions on this legislation are like navels...everybody has one. Some expert economists (whatever they are) think the legislation is flawed; others think it's great. Some experts predict that the government could actually make money in the long term as the economy recovers; others think it will lose its fiscal shirt. Congress continues to run scared at having to actually take some action for which it might be held to account.

Okay, I'm done with this for now. I'll spend some more time reading the draft legislation and listening to the arguments and deciding how I really feel. But I think my fundamental concerns will remain unchanged:

1. Those who created the crisis will go unidentified and unpunished;

2. Oversight of the recovery will be in the hands of the same people who created the crisis in the first place;

3. In a misguided attempt at fairness, people who took out mortgages they couldn't afford will receive economic assistance they don't deserve; and,

4. The average taxpayer will pay the bill.

And that pretty much sums it up.

Have a good day. More thoughts tomorrow.


Sunday, September 28, 2008

The Somewhat-Jaundiced View from Sunday

It took a while, but I think I've finally found someone more irate about the financial crisis and proposed "rescue plan" than I - my daughter.

Her anger is based on a part of the proposed plan I hadn't heard about yet and still haven't been able to verify...one which would permit homeowners who bought property they couldn't afford with variable-rate mortgages to refinance their mortgages at a lower, fixed rate based on the new, depressed value of their property. For instance, someone who bought a home for $650,000 at a variable rate could now refinance the new value - say, $300,000 (not a stretch around here) at a lower, fixed rate. Essentially, they'd get $350K worth of free house.

If this is accurate (and, again, I haven't seen it anywhere myself), I also think it's way beyond fair. Even if these homeowners were sold a bill of goods by unscrupulous lenders who sold them loans they knew the people couldn't afford, what message does this send to the people like my daughter who purchased less-desirable homes in less-desirable locations because they knew it was what they could afford? We could now see people who overreached (for whatever reason) being rewarded for their fiscal stupidity while those who were smart and managed their finances wisely becoming the big losers.

If it turns out to be accurate, it'll just add another few degrees to the top end of the anger meter.

This morning Mike offers a collection of editorials he's culled from various papers, some of which are quite good. This is a quote from one of them that appears to scratch my daughter's itch:

"...The government should buy selected batches of these loans at 25 cents on the dollar. These loans then should be examined individually. For any of those in or near default, an attempt should be made to renegotiate the terms of the loan based on the buyer's ability to service the loan. New terms should be established as follows: The principal should be established at the higher of the current appraised value of the home or 85 percent of the paid-up balance of the original loan; fixed interest rate no lower than 5 percent; and terms not longer than 40 years. If these conditions cannot be met, foreclosure would be the last resort" (italics are mine).

According to CNN this morning, a bailout deal is apparently near despite Senator McCain's meddling on Friday that tanked an earlier plan. Based on the contents of the article, it's probably about as good a plan as a Congress as screwed up and cowardly as ours is likely to approve, but I still have a major problem with it. Here is an excerpt from the CNN article:

"...Under the tentative deal being finalized, the rescue program would be overseen by a board including the Treasury Secretary, Secretary of Commerce, head of the Securities and Exchange Commission and chairman of the Federal Reserve...".

Now, correct me if I'm wrong, but are these not the same people whose lack of oversight and management of the economy helped get us into this mess in the first place?

I remember the Savings and Loan meltdown in the 80's. I wonder what kind of mess we're laying the groundwork for another 20-odd years from now.

Have a good day. More thoughts tomorrow.


Saturday, September 27, 2008

A Saturday Extra - Things You Should Read

As you all know, I've been doing a lot of raging lately about the abysmal leadership and greed that got us into the economic and political crisis in which we find ourselves. I like to think that I'm a compelling writer and a reasonably well-informed and thoughtful guy. But I'm driven by my passions and sense of outrage as much as anyone else.

To get a thoughtful and - if I can use the term guardedly - moral analysis of the situation, you may be interested in these three articles from In All Things, the blog of America, The National Catholic Weekly: The Dark Knight and the Bailout; Memo to Pope: Encyclical, Please; and, McCain's Stunt, John Paul's Principles, and Obama's Opportunity.

You don't need to be Catholic, or even particularly religious, to see the moral common sense. I almost always enjoy reading the posts in this blog, and I wish I'd written any of the three I cited above, but particularly the first and third pieces, written by Michael Sean Winters.

Food for thought at a time when we have a thinking person's famine.

Have a good day. More later.


Cartoon Saturday

The first presidential debate has come and gone, a Chinese taikonaut has made the first spacewalk for his country, Congress is still doing the flaming toupee dance over the Save-the-CEO Program, and the last time I saw rain like we're having, my neighbor was building a really big boat and lining his pets up by twos.

Time for Cartoon Saturday.

Like many of you, I've had to rethink my retirement planning so that I can do my part to save Wall Street. As a patriotic American who can't stand the thought of poor, suffering financial magnates actually being held accountable for their actions, I can do no less. Here two of my new approaches:

Yes, real estate markets are tough. Remember Hoovervilles? You may want to stock up on large appliance cartons, tar paper, and plastic sheeting, as they're investments that are likely to increase in value, unlike your house...

Along with the tanking of the economy comes a decline in service across the board. I thought this cartoon from a German magazine about nailed it...

For you non-German-speakers, the bottom caption reads "railway platform comedians" and the sign says the train will be about 40 minutes late. The man on the left says, "Wow...that's a whole five minutes less than usual!", to which the woman replies, "And we complain about higher prices."

And finally, just because we need something silly to laugh at besides "Congressional leadership"...

Quote of the day from this Daily Show with John Stewart clip on Miss Cellania's blog:

"It's his Achilles head."

... referring to Treasury Secretary Paulsen's foresight in seeing the economic disaster coming.

What did you think of the debate last night? I'll let you know what I thought in the next post.

Have a good Cartoon Saturday. More thoughts coming.


Friday, September 26, 2008

A Few Simple Questions

As many old jokes begin, there's good news and there's bad news.

The good news is that Green Canary's dating situation appears to have dramatically improved, and I'm very happy for her and for Mr Mystery. She's my favorite virtual soap opera, and I wish her well.

The bad news is that - with all the bipartisan agreement on how dreadful our economic situation has become - CNN can run a headline that reads, "Bailout Talks Implode, Leaving Economy's Fate Unresolved." The first line of that story reads, "...high-stakes negotiations over the proposed $700 billion bailout of the nation's financial system dissolved into bickering, begging and a roiling battle between parties Thursday night."

I trust you are as shocked as I am.

I have often admitted in this space that I'm no mental giant when it comes to matters of economics. I can't even tell the difference between a "collateralized debt obligation" and a "credit default swap." I thought the Lehman Brothers lost the battle of the bands to the Jonas Brothers. I thought banks were where you went to deposit your money so you could get it back again later when you needed it. I thought insurance companies were supposed to invest your premiums and make lots of money so that they could find creative ways to deny your claims later. I thought financial institutions were bedrock structures of granite and steel bars and sober men in dark suits behind huge, polished oak desks who kept the financial heart of the nation beating.

Well, that's what I get for thinking. Unfortunately, I can't stop thinking...

In an interview quoted this morning in the CNN story linked above, presidential candidate Barack Obama said that there "...has to be a sense of urgency on the part of everybody. ... We've got to move rapidly."

Hmmm....if we really need to move that rapidly, Mike has a good plan this morning.

This leads me to a few simple questions for those who are supposedly trying to resolve the financial meltdown:

1. Why, since this mess has taken years to develop into the gravest fiscal crisis since the Great Depression (or, at least, since three days before my last payday), must it be solved in a matter of days? Go back and read what I wrote yesterday's post about paying attention to the man behind the curtain. That's what's happening. Nobody wants you to know the truth of how big the mess is, how much it will cost you, and how complicit the people we trusted are in its development.

2. (Trick Question) Where is the $700 billion to pay for the bailout (or, to use the more charitable term, "economic rescue plan") coming from? We all know the answer to that...it's coming from increased taxes paid by you and I, our children, our grandchildren, and their children. No one will tell you that, and they'll try to hide it in obscure economic terms, but you know it's true.

3. (Another Trick Question) Who is responsible for this mess? The short answer is "everyone." Much of the blame goes to the armies of MBAs who dreamed up all the exotic ways to turn debts into lucrative moneymaking schemes. A lot of it goes to those who were responsible for overseeing the economy and making sure this didn't happen, but were asleep at the switch. A contributing factor is the cost of a needless war that's being paid for off the books by emergency authorizations instead of properly-scrutinized and debated budget items. But the real answer is that much of the responsibility comes back to well-intentioned but stupid Congressional action to make home ownership possible for everyone...even those who couldn't afford it. I'll talk more about this in another post.

4. (The Third Trick Question) Who has acknowledged the least amount of blame for the mess? Don't everybody speak at once, now.

5. (Last Trick Question) How many suits will go to jail as a result of destroying the national economy? If you answered anything other than "none," you don't know much about DC politics.

And this isn't really another question, but an observation...you might be interested in this article which appeared below the fold of the front page of yesterday's Washington Post: U.S. Appeals Abroad Fall Flat as Leaders See No Crisis at Home. Yes, the nations of the world who are the first to look to the United States to save their bacon in times of dire crisis are blowing us off. I don't believe in isolationism, but I understand its appeal. Remember this the next time another "ally" or "friend" needs help and comes to Uncle Sam to open his checkbook.

And so I continue to shake my head and enjoy the good news that comes from fewer and fewer places...Green Canary's love life, Zipcode's vacation, Aaron's chance to drive an "excavator," and the new season of Dancing with the Stars.

Have a good day. Hang in there. More thoughts coming.


Thursday, September 25, 2008

Toxic Waste and Dancing with the Stars

I've been fulminating about the current economic disaster and the lack of Presidential and Congressional leadership to deal with it for a few days now, and so it's time to shift gears just a little bit. I'm so angry about the whole thing that it's probably better to back off for a day or two lest all my readers start to think that I'm obsessed or something. Even if I am.

Like many of you, I like to follow the statistics of visits to my blog. According to MyBlogLog, I have learned that my two most-read posts are "Don't Dig Here!" (1,951 hits) and "Helio Castroneves Wins Dancing with the Stars" (3,351 hits). "Don't Dig Here!" discussed the problem of how to craft warnings about toxic waste dump sites to civilizations tens of thousands of years in the future; the other, of course, was my summary of the last season of "Dancing with the Stars."

Speaking of toxic waste, and considering the speech presented by President Bush last night, you may enjoy this great editorial cartoon from Tom Toles of the Washington Post earlier this week:

Yucca Mountain, of course, is the yet-to-be-opened storage site for nuclear waste in the remote Nevada desert.

Speaking of "Dancing with the Stars," like most ballroom dancers I'm of two minds about the show. My friend lacegem, commenting on yesterday's post, said she'd stopped watching the show because "...Most of America only votes for the cute couple or the hot looking star or dancer & not necessarily the best dancer," and notes that she'd rather watch "real ballroom dancing on PBS." In one way, I agree with her. It's very frustrating to watch people with real talent like Sabrina Bryan
and Melanie Brown

get voted off while talentless losers like "Master P"

and talentless but entertaining losers like George Hamilton

and, this season, Cloris Leachman

keep coming back.

But nevertheless, I keep watching...it's sort of like the fascination that makes one want to gawk at a ghastly wreck on the highway. And who knows? It may be tacky and puffed up with Hollywood kitsch and fluff, but Dancing with the Stars is better than no dancing at all.

And someday, I will have my waltz with Edyta Sliwinska.

Have a good day. Hold on to your wallets...Congress is still working on the plan to save its favorite campaign contributors.

More thoughts tomorrow.


P.S. - If you have MS-Office installed on your computer, and would like to see a great (if somewhat crude) PowerPoint explanation of the subprime mortgage mess, e-mail me at bilbo_the_blogger (at) yahoo dot com and I'll send you a copy. You'll love it. Mike, I already sent it to you.


Wednesday, September 24, 2008

Pay No Attention to the Man Behind the Curtain...

One of my favorite - and most useful to quote - lines from the classic film The Wizard of Oz comes when Toto the dog pulls aside the draperies in the throne room to reveal the old man manipulating the controls which produce the image of The Great and Powerful Oz. Seeing that he has been exposed, the man shouts into his device, "Pay no attention to the man behind the curtain!"

That's rather how I feel as I watch the Wall Street bailout take shape.

Treasury Secretary Paulsen and Fed Chairman Bernanke are urging rapid action to "stabilize the situation" and "avoid very serious consequences," the President is soberly pontificating about quick and bipartisan action, and - of course - Republicans and Democrats in Congress are pulling in different directions. Most of this is going on behind closed doors, because those of us in The Great Unwashed can't be trusted to understand the weighty matters involved, and should just trust our Betters to solve the problem.

Pay no attention to the man behind the curtain.

Which, of course, is why we're peering out of this pile of smoldering economic wreckage now...for years, nobody paid any attention to the men behind the curtains. And worse, Congress was very busy helping the financial industry hang ever more curtains.

This CNN article talks about Senator McCain's "five fixes" to the financial recovery plan (which, as far as I can tell, can't be fixed because it hasn't been agreed on yet). His five fixes include:

1. Greater accountability for the bailout, including an "oversight board." Who, exactly, will be responsible for deciding who gets how much help, and who will monitor how that money is being used and accounted for?

2. A plan to help the taxpayers who are paying the bill recover the $700 billion we're being asked to pony up.

3. Complete transparency in the process: Senator McCain is quoted as saying, "This can't be cobbled together behind closed doors. The American people have the right to know which businesses will be helped, and what selection will be based on, and how much that help will cost" (pay attention to the man behind the curtain for a change?).

4. A cap on the pay of executives of companies receiving federal bailout help. The suggested cap is the largest pay rate for a federal official - currently that of the President, or $400,000 per year. I don't know about most CEOs, but I could probably live on $400K per year.

5. No added earmarks or other pork barrel spending (because you just know that there are more bridges to build in Alaska and railroad museums you and I must fund in Pennsylvania).

I like these ideas. Of course, Senator McCain might have considered these ideas at the time he was championing the deregulation that helped bring us to this mess, but that train has sailed.

For his part, Senator Obama has said that it is "...wholly unreasonable to expect that American taxpayers would or should hand this administration or any administration a $700 billion blank check with absolutely no oversight or conditions, when a lack of oversight in Washington and on Wall Street is exactly what got us into this mess." He went on to say that taxpayers should be treated like investors if they are being asked to underwrite the bailout.

Good words. But then, he went on to advocate middle-class tax cuts as being "absolutely necessary to strengthen the economy." I like the idea of lower taxes as much as the next guy, but I have to ask myself this: if we cut everyone's taxes, where is the $700 billion for the bailout going to come from? This article from MSN Slate Magazine asks that question pretty well. When you and I buy something, we generally know how we plan to pay for it (even if it's with a credit card). But then, we don't usually spend $700 billion at a whack.

So where is that money coming from if it isn't coming from our taxes? You have to know that the Republicans will never let any of the businesses suffer the burden of paying more taxes.

Who pays?

Don't worry. Trust Congress and its advisors from the financial industry.

Pay no attention to the man behind the curtain.

Have a good day. More thoughts tomorrow.


P.S. - as if I weren't feeling sour enough, the first couple to be eliminated on Dancing with the Stars this season was Jeff Ross and Edyta Sliwinska. Forget Jeff Ross...I'm in lust with Edyta. Sigh. It's going to be a long season until the finals without her.


Tuesday, September 23, 2008

The Missing Link

Here is the link to the Bloomberg.com article referenced in my earlier post this morning. Now you can read the whole thing and not just my excerpts.


Someone Else's Fault

One of the most amazing things about our current situation is the utter unwillingness of anyone in a position of political, business, or economic authority to take any responsibility for the smoking crater that used to be a thriving economy. If you listen to the Republicans, it's the liberal-tax-and-spend-dopesmoking-treehugging Democrats who are 100% responsible for the whole mess; if you listen to the Democrats, it's the greedy, heartless, warmongering, hug-Wall Street-screw-Main Street Republicans who all on their own dragged us over the fiscal event horizon into the biggest economic black hole since 1929.

Where I come from, we call this a self-serving crock of caca.

My friend Jake, who always knows which buttons to push to send me into a towering blograge, yesterday sent me a link to an article on Bloomberg.com, with the comment that it was "Bloomberg's take on when and how the stock market meltdown became inevitable." I don't have the link here at home (it didn't carry over when I forwarded our e-mail exchange to my home account), but I'll post it later when I get to the office so you can read the full article. In the meantime, here is the text of the broadside I launched in response...



It would be considerably easier for a thinking person to accept this blatantly biased screed if the author had spent a bit more time on context and analysis and a bit less on partisan spite.

For instance, consider the sentence, "But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years." I very seriously doubt that only these three high-profile Democrats received largesse from Fannie and Freddie over the years...and yet no lesser Democrats, and certainly no Republicans, are mentioned. I would be absolutely amazed if there were no Republican feeders at the trough as well. In fairness, had this article been written by a Democrat, I'm sure the reverse would have been true...Republicans castigated, but no Democrats.

The article also takes a fairly superficial look at the history. Referring to the Fannie and Freddie reform bill (not specified by name or number), the article claims that "...the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter." This might be easier to swallow if there were some context. Why did the craven Democrats oppose it? What efforts were made by the righteous and incorruptible Republicans to identify the Democrats' problems and negotiate a mutually agreeable solution? We are gathering the harvest of the I'm-right-screw-you style of politics that makes Independents like me sick.

This ridiculous balderdash continues: "That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: 'It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''' Here we have one group accusing another of an "obscene" and "reckless" stand, and the bald statement that those opposing a particular issue "...could not possibly do so if their constituents understood what they were doing." How many in Congress understood what Fannie and Freddie were doing? Where were the leaders of either party who took the time and effort to explain to their constituents what was at stake, why, and why their proposed way ahead was better...instead of just demonizing the other side of the aisle? The level of arrogant stupidity and avoidance of responsibility here is beyond belief.

Articles like this are a horrendous disservice to the public. They offer nothing but finger pointing and self-righteous accusation while avoiding any hint of responsibility for the mess that both parties have created by rolling over for the monied interests who own Congress.

And don't bring up Greenspan, either. If he had spent more time speaking in clear English so that everyone from "Main Street to Wall Street" could have understood, he might have done us some good. Instead, he spent years making an opaque mess even more opaque.

We're being asked to put up hundreds of billions of dollars to bail out the bastards whose greed has brought us to this point, and we're being told it has to be done because they're "too big to fail." We, of course, are too small to matter.

I'm not interested in hearing anything that says everything is the fault of either the Democrats or the Republicans. They've both been asleep at the switch. Stop all this ******** about how either the Liberals or the Conservatives are the devil incarnate."


Here's another wonderful example of lack of responsibility and leadership, and the prevelance of the greed and hypocrisy that brought us to this point. In describing Congress's efforts to construct a "rescue plan" to salvage something from the crisis, the article says that "financial institutions are weighing in with what they want in the bill...the Financial Services Roundtable - a lobbying group representing the nation's banks - called on Congress to make the plan 'broad enough to include different types of assets' (the emphasis is mine)."

Did you understand that? The financial wizards who dreamed up all the "assets" that turned out to be worthless are now demanding that Congress protect them from the fruits of their greed. If you aren't disgusted, you're not quite awake yet.

I could go on, but here's the bottom line of my rant: there's no leadership. No one is standing tall and saying that he/she really screwed up and is working hard to help fix the problem. No one - especially any of the reinforced armies of MBAs who dreamed up all the fiscal shenanigans that brought us to this mess - is accepting any responsibility...they're all sitting at the trough, whining that someone needs to save them from this debacle that's someone else's fault.

There's no leadership. No one is standing up and explaining exactly what happened, why it happened, who was responsible, and what needs to be done to fix the disaster. President Roosevelt would have had a Fireside Chat to explain it all in terms a farmer or factory worker could understand. President Bush just fires salvos of sound bites that blame the Democrats.

At a time when we need real, inspiring, confidence-building leadership, we have a bunch of finger-pointing, responsibility-avoiding fools who have not only presided over the wreckage of the present, but see no problem with sticking you and I, our children, our grandchildren, and our great-grandchildren with the bill.

Think about that when you cast your vote in November.

Have a good day. More thoughts tomorrow.


P.S. - on a happier note, the new season of Dancing with the Stars started last night, and was most entertaining. Models Brooke Burke and Kim Kardashian, and Olympic gold medal beach volleyball player Misty Mae-Traenor seem to be possible standouts among the ladies; while champion sprinter Maurice Green and Super Bowl hero Warren Sapp did a surprisingly good job for the men. The best part, though, was the performance of 82-year-0ld Cloris Leachman during her receipt of the judges' comments...by my count, she was bleeped out at least four times, not to mention shamelessly vamping at all the judges.

It'll be an interesting season...


Monday, September 22, 2008

Comments on Comments

Like all die-hard bloggers, I always enjoy reading the comments posted by my readers. Whether they agree with my ramblings, take me to task for perceived brain misfires, or just say hello, they mean that someone out there in the electromagnetic beyond has stopped by, read what I've written, and taken the time to comment.

Of course, there are gradations of comment goodness. Yesterday's documentation of our family portrait session, for instance, prompted Mike to turn to the Mr Hyde side of his nature and point out "the guy in the picture that doesn't look like he belongs. You know, the goofy lookin' guy in the back row with the glasses." I was saddened by that comment, because I went to great lengths to look presentable for the picture. I took a shower (a whole month out of cycle!), followed Agnes's explicit directions on how to dress, and even wore shoes! Of course, I didn't get credit for the shoes, since they don't show in the pictures, but still...

Then there was the comment from gentle reader lacegem, who referred to the same post as "very wholesome & family oriented." I know she meant well, but it's going to be tough showing my face at the curmudgeon conventions if I get a reputation for being "wholesome and family oriented" rather than "crusty and opinionated." But I'll manage. And lacegem, in answer to your question, Leya was not named for the Star Wars princess...she's a princess in her own right.

John, always upbeat and cheerful, said that we had "Great pics!" and went on to comment that "Some days (most days) it's best not to read the news and just count your blessings." Although I'm not a traditionally religious person, the concept of "counting my blessings" is central to my outlook on life. Those of you who have read my past Thanksgiving Day posts know that my very favorite holiday is the one on which we reflect on all the reasons we have to give thanks...in my case, the list is long enough to justify use of the entire holiday weekend and more. If anyone has reason to count his blessings, it's me (oops...the linguistic purist in me reminds me that I meant to say, "It is I." Sorry.)

Jean-Luc Picard, commenting down the wormhole from the command deck of the starship Enterprise in the 23rd century, described the pictures as "super," cementing his reputation as a diplomatic and gracious captain.

And my old friend "anonymous" noted that Leya and Great-Grandma had the same expression in the last picture. Hmmm...I guess they did. But no one can get Uroma (that's the German word for "Great-Grandmother") to smile like Leya can.

Okay, I have managed to be positive and upbeat for two posts in a row, in spite of the world's best efforts to get me to comment on the unpleasantness and misery that surrounds us. But fear not! The commentary pressure is building and I'm sure I will have my full head of curmudgeonly steam rebuilt by tomorrow.

You have been warned.

Have a good day. More thoughts tomorrow.


Sunday, September 21, 2008

Of Family Pictures and Other Things

In response to all of you who have commented hoping that I'm feeling better, be advised that I'm slowly recovering from The Cold from Hell. This morning I just feel like I've been beaten with a 2x4 instead of feeling like Galveston after Hurricane Ike's visit. I guess that represents progress. The lesson, dear readers, is this: if a toddler with a cold wants you to drink from her sippy cup...don't.

One of the things Agnes was intent on doing while her parents are visiting was to have a family portrait done, and so yesterday we herded the family cats to a rendezvous at a local Sears portrait studio for the Great Event. I was prepared for an escapade worthy of a classic episode of the old TV show Mission: Impossible (forget the stupid Tom Cruise movies), but it turned out better than I'd expected...Leya was happy, well-rested, and in peak cute mode, none of us looked especially stupid on any of the pictures (and believe me, I can look stupid in pictures), and we were much entertained by the nice young photographer who evidently took first place in her class on Making Silly Noises to Get Children to Smile.

In twenty-six years of marriage, I think I have managed to take one picture of Agnes's mother actually smiling. The photographer got one yesterday on the first try...of course, Dad acting silly helped:

The whole family group was a bit harder to arrange, as nobody wanted to agree on exactly when to look at the camera. But we managed it somehow:

And, of course, we needed the mandatory Four Generations picture:

We do have some very nice-looking ladies in this family, if I say so myself.

I was glad that the picture taking went so well, because it helped to offset my feelings when I looked at the CNN website home page this morning. Here is a sampling of the headlines:

* Czech Ambassador Killed in Pakistan Hotel Blast;
* Weekend Attacks Leave Dozens Injured in Iraq;
* Dozens Killed in China Mine Accidents;
* Seven Hurt in Basque Bombings;
* Bush Seeks $700 Billion for Bailout; and,
* Teen Smiles After She's Convicted of Killing Roommate.

There's just more of the same when you start scrolling down the page. The closest thing to a good-news story is:

* Dachshunds dash in wiener suits.

Which is, nevertheless, probably a bit embarrassing if you're a dachshund.

So if the best news around is about wiener dogs racing in wiener suits, I'm glad I have a great family to fall back on.

I hope you do, too.

Have a good day. More thoughts tomorrow.


Saturday, September 20, 2008

Cartoon Saturday

The Feds are spending 800 billion (yes, with a b) dollars of your money to bail out Wall Street, Galveston is still a mess, we actually have a candidate for vice president who believes creationism ought to be taught in schools, and my nose is still running like an illegal immigrant heading north from Mexico.

Now, more than ever, we all need Cartoon Saturday.

AAAARRRR!! Ye may not have known it, but yesterday was International Talk Like a Pirate Day. Avast yer scuppers and shiver yer mizzens and all that stuff...

Zero_zero_one now has his PhD in math and is making his way in the cruel world of job seeking. Perhaps sign painting may be right for him...

With Messrs Obama and McCain each trying to outdo the other in creative pandering to various interest groups, these two cartoons are pretty timely...

And finally, from the department of Scenes We'd Really Like to See...
Tomorrow, I'll return to real posts. Today, I face the daunting challenge of herding all the family cats to the studio for family pictures. You'll recognize me in them...I'm the one with the red, glistening nose.

Have a good day. More thoughts tomorrow.


Friday, September 19, 2008

Taking the Easy Way Out

Normally, I would have yet another witty and thought-provoking post for you today. Unfortunately, today I am feeling neither witty nor thoughtful. Today, I am suffering The Cold From Hell, courtesy of my granddaughter (I told you yesterday that it was coming, and it didn't take long).


In order to minimize the horrendous, ear-splitting noise of the keys crashing down on my keyboard, how about we do an extra edition of Cartoon Saturday this week? I'll refund the cost of your subscription if you want. Not.

I've been saving this one for a while; I love it because it's so ... well ... out there:

Another twist on the "Beware of Dog" theme:

Bilbo takes his car to the shop...

There's always 10% who either don't get the word, or get it but don't get it. Get it?

And finally, you know how I feel about organized religions. And insurance companies. Be very afraid when they intersect...

Tomorrow will be Cartoon Saturday, as usual. By Sunday, I should be feeling better and able to do the post I wanted to do today, which ought to spin up some of my readers. To get a preview of Sunday's topic, read this article on the Project Syndicate website.

Have a good day. More thoughts tomorrow.


Thursday, September 18, 2008

From the "Wonderful Headlines" Department

There's a wonderful book by a PhD teacher of English named Richard Lederer titled "Anguished English," which is his compendium of the most hideous assaults on the language by children, college students, and professionals who ought to know better. One section of the book is devoted to "Two-Headed Headlines" - those banners in the newspaper that may or may not be intentionally goofy. Some of Professor Lederer's examples include:

Police Discover Crack in Australia (watch out, Amanda!);

Doctor Testifies in Horse Suit (the trial date was probably October 31st);

Grandmother of Eight Makes Hole in One (after a while, even beloved grandchildren can drive you nuts);

Many Antiques Seen at D.A.R. Meeting (for those of you not in the U.S., "D.A.R." stands for "Daughters of the American Revolution"...draw your own conclusions);

Men Recommend More Clubs for Wives (the poll was probably taken among Pakistani and Saudi Muslims...see here for more information); and,

Robber Holds Up Albert's Hoisery (Albert's face must really have been red).

I thought about this topic when I saw this headline on the CNN website this morning: Stripper Wells Target Energy Crisis.

If you actually click the link, the title of the article is a bit different and makes more sense. But I like the front page headline better. Who is the stripper named Wells who is taking on the energy crisis? Can she (he?) do a better job than Congress? Or does it refer to the source from which we get strippers? Where do I sign up? And if I did own a stripper well at my age, wouldn't I end up with an energy crisis of my own?


Well, I've been on vacation the last three days, getting my in-laws settled in for their two-week visit. In honor of the occasion, super-cute great-granddaughter Leya has come down with a miserable cold, which I will no doubt contract in due course since she loves her grandpa and always wants to share everything with him...

Have a good day. More thoughts tomorrow.


Wednesday, September 17, 2008

At Last: The Financial Crisis Solved!

Just when I was losing hope that anyone would be able to solve the financial crisis gripping the nation and the world, I got a boost yesterday while I was listening to The Diane Rehm Show on NPR. At one point in a discussion titled "The Economy and the Presidential Campaign," one of the show's guests (I wish I could remember which one) said that it was not out of the question that Congress might be called back from its upcoming recess for a special session to deal with the economic crisis.

Hmmm...this would be the Congress that, through its reckless dependence on political orthdoxy and flagrant kowtowing to special interests with deep pockets, got us into this mess in the first place, would it not?

I feel soooooo much better!

I also felt good yesterday when the government finally drew yet another shallow and wavy line in the fiscal sand and elected not to bail out Lehman Brothers. But then the news this morning is that insurance giant AIG has been bailed out to the tune of 85 billion dollars.

I guess we should all feel better now...we can be recklessly irresponsible with our own money (if we have any left) and everyone else's and - as long as we've made the right contributions to the right politicians and parties - we'll never have to worry about losing our financial shirts.

Yeah, right.

Once again, Bilbo's First Rule of Economic Policy applies: "financial institutions" may be too big to fail, but Real People will always be too small to matter.

I think I'm going to move all my money to the First National Bank of Under the Mattress and depend on the old, established firm of Smith and Wesson to insure it, rather than relying on the notable economic acumen of the bloviating, devious fools who drove us to this point.

I can hardly do worse. I won't earn any interest, but then, I won't lose my interest and my savings so Congress can bail out a business more important than I am, either.

Have a good day. More thoughts tomorrow.


P.S. - do you remember the old Loony Tunes cartoon in which one character kept drawing lines in the sand to taunt another into moving forward...and the last line was at the edge of a cliff? That's how I feel when I open the newspaper every morning.


Tuesday, September 16, 2008

What Were They Thinking?

Hurricane Ike, this year's reincarnation of Hurricane Katrina, has devastated Galveston and marched up though the nation's midsection, leaving problems in places you don't usually associate with hurricanes - yesterday, my daughter-in-law called us from Ohio to let us know they'd had 80-mph winds, lost some shingles from their roof, and are without electricity indefinitely. The crowning indignity is that both her place of work and my son's have electricity and are open...but the schools are without power and closed.

But let's return to Galveston and today's lesson in utter and complete stupidity.

As Ike was rolling across the Gulf of Mexico gathering strength as it headed for Texas, the National Weather Service started using expressions like certain death to describe what awaited those who ignored the mandatory evacuation order and decided to ride out the storm in Galveston. Satellite photos showed a storm so huge it filled the Gulf. Huge storm surges were predicted. Certain death was mentioned over and over. The mandatory evacuation was implemented, and the authorities were very clear that those who chose not to evacuate shouldn't expect anything.

Did I mention the parts about certain death and mandatory evacuation?

Well, what do you suppose happened?

According to this CNN article, and reporting on NPR over the last few days, about 15,000 to 20,000 people stayed on Galveston Island, ignoring a mandatory evacuation ordered in the face of a storm promising certain death...and now comes the whining about how FEMA isn't providing them with supplies and the government isn't helping them and nobody told them the storm was coming and blah, blah, blah.

My comment: too damn bad. You were warned for days that the storm was coming. You were told you faced certain death. You decided you were tougher than some old storm.

You were wrong.

You decided to act like an idiot, and I don't think it's my problem to bail you out of the fruits of your stupidity.

Why is it always this way? Why do we end up having our policies and efforts driven by the dumbasses from the shallow end of the gene pool?

I don't want to seem heartless, but in cases like this, I am. Having to rescue people who refuse to evacuate in the path of a monster hurricane is just as bad as ... oh ... rescuing fat cat CEO's that run their financial institutions into the ground and then stick the rest of us with the bill.


And it gets better - now the petroleum industry has a golden excuse to jack up the price of gasoline again. Aren't you glad?

Okay, I'm done ranting. For now. Somehow it's appropriate that today is the day I get to enjoy the sublime pleasure of my routine flexible sigmoidoscopy exam. If you don't know what that is, look it up. Or wait until you're a certified old goat like Mike and I.

Have a good day. More thoughts tomorrow.


P.S. - Agnes's parents arrived yesterday - safe and sound, if a bit the worse for wear. Agnes is in a state of controlled fury because she'd arranged for the airline to meet her parents (86 and 90) with a wheelchair and assistance in getting through immigration and customs...and no one showed up to help them. Today would be a bad day to be the person she arranged all this with.


Monday, September 15, 2008

Update - Fannie Mae & Freddie Mac CEOs May Not Get Golden Parachutes!

I feel a little better based on this article I just read in this morning's Washington Post: "No 'Golden Parachutes' for Fannie, Freddie's Ex-Chiefs." Let's hope my optimism is not premature...


My New Retirement Plan, and Accompanying Economic Rant

My new retirement plan is very simple. My 401k and IRA are in the toilet, and I'm too small for the Feds to worry about bailing out, so I'm going to take my last assets and start up my own investment bank, run it into the ground, and then ask for a bailout. It can't miss.

Given the marvelous economic news of the last few months, my current retirement plan involves looking for a nice, big refrigerator box to live in. I may as well just sign everything over to rich investment bankers now rather than wait for the government to do it later.

That's how it works, of course. They're too big to fail, but you and I are too small to matter.

I thought there was hope today when the government decided not to bail out Lehman Brothers, but then I realized that Lehman Brothers was in the same boat the rest of us are - they weren't too big to fail, so the feds cut them loose.

And just so you can feel better about the Fat Cats' raids on your savings, here's a quote from the CNN Money article about the Lehman Brothers collapse:

"The Federal Reserve announced a series of steps to support the financial markets. The Fed said it would expand its short-term lending to banks by starting to take all investment-grade debt as collateral - instead of just Treasurys and other high-grade securities."

The emphasis is mine.

Now let's be sure I understand this...the Fed is going to lend to banks which have already demonstrated their irresponsibility and greed by accepting "all investment-grade debt" as collateral. What's "investment-grade debt?" Isn't that what got all these greedy bastards into trouble in the first place?

I really wish I knew more about economics. No, actually, I don't. If I really understood the depth of the greed of the "financial institutions" and the level of smug arrogance that leads white-collar thieves to assume they can get the government to crush us to save themselves, I'd probably either kill myself or want to declare open season on "investment bankers."

Washington Post business columnist Steven Pearlstein wrote an article last week titled "Don't Like Bailouts? Consider the Alternatives" that spun me up in several ways:

First was his assertion that "History shows that rather than costing taxpayers, the rescues have often wound up making money." He then listed bailouts he claimed actually benefited the government, concluding that "...if (the government) is willing to wait until housing markets finally recover, there's a good chance the government will recoup most of its investment, along with a 10 percent annual dividend and a hefty guarantee fee." I find that very comforting as I look at the wreckage of my retirement accounts. Even if this long-term fairy tale is true, it will do nothing toward helping those of us who have been fleeced first by the crooks, and then by the government that helps them out.

Second was Mr Pearlstein's tossoff of "moral hazard" (the argument that those who abuse their trust must bear the consequences) by suggesting that "...using moral hazard to argue against the carefully structured rescues of Bear Stearns or Fannie and Freddie is a bit likely arguing that any sentence short of capital punishment is insufficient to deter bank robbery."

And then was this statement: "Remember that even with the rescues, top executives at Bear Stearns, Fannie Mae, and Freddie Mac lost their jobs, their reputations, and most of their net worth, while long-term investors lost all but a tiny fraction of their money." You may recall my discussion a few days ago about the severance packages of the Fannie Mae and Freddie Mac CEOs...if I lose my job, I doubt that I'll get a severance package valued in the millions to cushion the supposed loss of my reputation. And I may be wrong, but I believe the losses those long-term investors suffered ("all but a tiny fraction of their money") are the losses you and I are being expected to make up through our hard work and taxes.

Was the cost of the alternative worse than the vast cost of bailing out these greedy fools? Perhaps. But unless we make some real, fundamental structural changes to how the financial markets are operated and regulated, we'll just keep riding this same old fiscal merry-go-round to a future of continuing financial chaos.

And you and I will keep buying the tokens to pay for the big guys to ride.

Have a good day. More thoughts tomorrow.


P.S. - Agnes's parents arrive this afternoon for a two-week visit, and so my posts may be a little irregular as we spend time with them. Bear with me. I'm still out here.


Sunday, September 14, 2008

Going to the Dogs

Zipcode had a very thought-provoking post last Friday about dog owners and their responsibility for how their dogs turn out. It got me to thinking about how we relate to pets in general and dogs in particular.

To the extent that I'm a pet person of any sort, I'm a dog guy. With a dog, what you see is what you get. You know when they're happy and when they're sad. You know what they like and don't like. A dog's affection for you is about as close to unconditional love as you'll find in this life...and no less an authority than former president Harry Truman once famously said, "If you want a friend in Washington, get a dog."

Cats, on the other hand, are in it for themselves. When you come home, a dog will run to greet you joyfully and make you feel like a million dollars. A cat will peer around a corner, note that you're home, sigh at the invasion of its space, and go back to hacking up hairballs on your pillow. If you're a cat lover, I'm sorry. I'll take a dog any day.

Our first dog was Wooly, a mixed-breed (Yorkshire and Scots) terrier who was the world's best family dog. She was loving and cheerful, and much smarter than any Republican or Democrat. Our daughter taught her all the standard tricks (sit, lie down, roll over, play dead, etc), but Wooly figured out early on that it was too difficult to remember all those dumb commands...if you told her to do something, she'd just go ahead and do all the tricks she knew, one after the other, figuring that one of them was the one you wanted. She also played Hide and Seek...we'd hide, she'd find us, we'd hide again, and she'd carefully examine all the places we'd hidden before - in order - before wasting her time looking in new places. Wooly lived to be nearly 16, and when she was so old and sick that she was miserable all the time, we sat in a circle in the kitchen and sent her on her way with a lot of tears and good memories.

Our next dog was Sidney, a purebred Siberian Husky, a beautiful dog with a brown-and-white coat, blue eyes, and the personality from Hell. When our daughter put her out of her room one night because she was making too much noise, Sidney tried to dig her way back in under the door...ripping up the downstairs hallway carpet beyond salvation. He also dug holes in the living room (both the carpets and a queen-sized sleeper sofa) and tore up the carpet on the first step from the foyer up to the main level of the house (to provide a nice view for arriving visitors). The year of our miserable back-to-back snowstorms here in DC (I think it was 1996), the only happy creature in the area was Sidney, who dragged my wide white fanny seven hundred miles through deep drifts on endless walks. Sidney eventually had to go, as my legs were only seven inches long from all the walking, and we couldn't afford the exorcism to get his unlimited energy under control.

Then came Pip (aka Punky, aka Pizza, aka anything-starting-with-a-P). She was part of a litter of abandoned puppies at the vet clinic where our daughter worked, and Yasmin decided that since no one was likely to adopt a dog that was apparently a cross between a Black Lab and a Rottweiler/Pit Bull/etc, we'd have to do it. Pip grew into another great family dog like Wooly - even-tempered, friendly, and fiercely loyal. She didn't like most men, but loved me. You can see her in my profile photo:

And in this picture from a few years ago:

Pip has departed this life for the place good dogs go to chase sticks, lounge on sunny porches, and enjoy ever-full food dishes and water bowls while they wait for us to catch up, and I miss her. She could be frustrating, but as friends go, they don't come any truer.

What do dogs mean to us? In his poem The Power of the Dog, Rudyard Kipling knew. And I'd like to think that for every sadistic moron like Michael Vick who chooses to abuse dogs, there are a hundred people like our friend Jodi who, with her husband Charlie, works tirelessly to rescue and provide homes for abused Akitas.

Want a friend in Washington? Get a dog. If you treat that dog like the living, loving creature it is you will have a loyal friend for life. If you don't, well, it says something about you, doesn't it?

Have a good day. More thoughts tomorrow.


Saturday, September 13, 2008

Cartoon Saturday

Hurricane Ike has crushed Galveston and is heading for Houston, we're getting to know Sarah Palin, we already know Joe Biden, and bookies are placing their odds on the next giant financial institution you and I will need to bail out.

Now, more than ever, you need Cartoon Saturday.

Sometimes when you're in uniform, things just go terribly wrong...

With the economy the way it is, and the chance of health care reform no more than a faint mirage shimmering on the horizon, it's only a matter of time until we reach the ultimate result...

In the picture that goes with my profile, which was taken in 2003, the dog with me is Pip, our Black Labrador. Pip was a great dog who, sadly, went to that great kennel in the sky last week after a long life as a beloved member of the family. One of Pip's characteristics was absolute terror of thunder, fireworks, distant explosions, or similar noises. This cartoon reminds me of her...

And finally, cartoonists have long mined the "taking the boy/girl home to meet the parents" theme. This one is especially good...

Interesting how much the Michelin Man looks like John McCain, isn't it?

Have a good day. More thoughts tomorrow.


Friday, September 12, 2008

Odds and Ends

No, this post is not about psychotics and football linemen. It's just that I'm feeling unusually disorganized this morning, so I thought I'd just share a few random things from my Blog Fodder files with you. It's my blog. I can do that.

I have the good fortune to work with a group of tremendously intelligent, intellectually stimulating people. Not that I'd ever tell them that, of course, because they'd just get swelled heads and make fun of me. Nevertheless, we do have some very interesting discussions which often result in some seriously out-of-the-box thinking on the issues of the day. A few days ago a wide-ranging discussion of American foreign and defense policy, and how it gets encapsulated in glossy documents no one reads, resulted in this diagram of the Bush Administration's National Security Strategy:You never knew it was that simple, did you?


My Daily Curmudgeon quotation list yesterday offered this wonderful summation from Orson Scott Card of how we approach electing our leaders: "If pigs could vote, the man with the slop bucket would be elected swineherd every time, no matter how much slaughtering he did on the side."


One of my old college friends suggests that we really need to live our lives backwards:

You start out dead and get that out of the way right off the bat.

Then, you wake up in a nursing home feeling better every day.

When you are kicked out of the home for being too healthy, you spend several years enjoying your retirement and collecting benefit checks.

When you start work, you get a gold watch on your first day. You work 40 years or so, getting younger every day until pretty soon you're too young to work. So then, you go to high school: play sports, date, drink, and party.

As you get even younger, you become a kid again. You go to elementary school, play, and have no responsibilities.

In a few years, you become a baby and everyone runs themselves ragged keeping you happy.

You spend your last 9 months floating peacefully in luxury, spa-like conditions, with central heating and room service on tap.

And finally you finish off as an orgasm.

I could get into that.


And finally, the sort of story you thought only Mike could dredge up for your entertainment: from MSNBC comes this amazing report - Cops: Burglar Wakes Men with Spice Rub; Suspect Also Strikes Sleeping Man with Sausage Before Fleeing. Datelined Fresno, California, the story begins, "Authorities say they've arrested a man who broke into the home of two California farmworkers, stole money, rubbed one of the men with spices and whacked the other with a sausage before fleeing."

Only in America.

Have a good day. More thoughts coming.


Thursday, September 11, 2008

Bilbo's Republicratic Party Platform, Plank #5: Economic Policy

Economic policy is the hardest part of the platform for me to write, because I know so little about economics other than it revolves around greed and herd psychology. You don’t need an MBA from Harvard Business School or a PhD in Economics from Yale, though, to know that the economy is in trouble. I have a BA in Linguistics and an MS in International Relations, and even I can recognize that the economy is in the toilet. Why is this? While I’m untutored in the Mystical and Arcane Rites of the Holy Mysteries of Economic Policy, I nevertheless perceive a few things that ought to be obvious, and since lack of knowledge has never stopped any good blogger before, with a ruffle of drums and a blare of trumpets, here is the starting point of my proposed economic policy:

1. Spending More Than You Earn Is Bad. If you and I engage in reckless deficit spending, we go to jail. If the government does it, reinforced platoons of dry-as-dust economists with PhD’s, bow ties, and leather elbow patches will be marshaled to explain why it’s a good thing. Whether you’re a Tax-and-Spend Democrat or a Don’t-Tax-but-Spend-Anyhow Republican, balanced budgets are smart. You and I need to pay taxes and the government needs to spend responsibly. Unfortunately, only you and I are held to our part of the bargain.

2. Unrestricted Capitalism Is As Bad As Blind Communism. John Kenneth Galbraith once said that under capitalism, man exploits man, while under communism the exact opposite is true. A purely capitalistic society focused on the generation of wealth tends to emphasize the business community and upper classes at the expense of the middle and lower classes. A purely communistic society removes the incentive to work hard by removing its rewards. Sound economic policy lies somewhere between the two, and requires a free-market economy governed by rational regulations to prevent the sort of excesses with which we are now all too familiar.

3. Quarterly Earnings Reports Are Stupid. One of the biggest faults of US markets is that we lack a long-term perspective. Businesses driven by the need to show profits each quarter will focus only on short-term gain at the expense of long-term growth and health. The solution: eliminate quarterly reporting of all economic statistics and replace it with annual reporting. This will help focus on long-term economic health rather than short-term profit, and minimize the whipsawing of the markets in reaction to short-term problems.

4. “Too Big to Fail” Equals “Too Dangerous to Survive.” When a Fannie Mae, Freddie Mac, Lehman, or Bear Sterns has grown so large that it’s failure can drag down large portions of the economy, something is wrong. Bigger is not necessarily better. The government must exercise some prudent judgment in determining how large a financial institution can grow before it becomes too much of a threat to the rest of the economy. Huge financial institutions are too big to fail, but you and I are too small to matter. Fired CEOs will get huge severance payments (see yesterday's post), but good luck getting your paltry 401k investments back.

5. Bring Back the Concept of “Moral Hazard.” In economic terms, “moral hazard” refers to the responsibility borne by economic decision makers for their performance, judgment, and prudent risk-taking. It implies that those who make the huge salaries should also bear the risk of punishment if their performance is poor. In practical terms, moral hazard is dead. The CEOs of Fannie Mae and Freddie Mac were fired, but each will walk away from the wreckage with millions of dollars in severance payments. Real People who exercise judgment that bad go to jail.

6. Publish Every Congressional Earmark in The Congressional Record, Along With A Detailed Explanation and the Name of the Sponsor. Congress will never give up its power to ship federal money home to the states in the form of earmarks. But the American Taxpayer (dumbass emptypocketus) has a right to know how the money he pays in taxes is being spent. Perhaps shedding a little light on the process will help bring it under control. Yeah, good luck with this one, too.

Looking back, I can see that what I've written is less a coherent economic plan than a series of rants about individual aspects of economic policy. I'll go back to the drawing board and try to do better. In the meantime, and with a head-nod to Mike, who blogged today about quotations, remember that it was George Bernard Shaw who famously said that, "A government that robs Peter to pay Paul can always depend upon the support of Paul."

Have a good day. More thoughts tomorrow.


P.S. - My son sent me this link yesterday to an animated feature called "Time for Some Campaignin'." Take a minute and visit. Turn on your speakers and prepare to laugh until the tears roll down your cheeks. At least once this election season, you'll cry for a reason other than the quality of your choices.


Wednesday, September 10, 2008

We Interrupt This Program to Bring You a Rant...

There are still several posts coming in the series documenting my Reformed Republicratic Party Platform, but I'm getting down to the hard stuff now, and have some more research and writing to do before they're ready. Fortunately, though, there is sufficient buffoonery going on in the news to give me plenty to write about while I finish off the other posts.

1. Between them, the fired CEO's of Fannie Mae and Freddie Mac will receive $23.9 million in salary payments. You can read the story here. The best part of the story is this: "Syron's (Freddie Mac's former CEO) package, Schmidt (an 'executive compensation consultant') said, is 'very unusual' because it allows him to receive $8.8 million in cash to replace stock grants and options that are now worth little or nothing. Representatives of Fannie and Freddie declined to comment." (Added emphasis is mine).

Now, let's make sure we all heard this correctly...the man fired for running Freddie Mac into the ground and sticking the U.S. taxpayer with an enormous debt is eligible for $8.8 million in cash because his stock grants and options are in the tank. And what about all the Freddie Mac and Fannie Mae stock that was in my 401k? I'll just bet that I'm in line to get my $8.8 million. I'm glad I still believe in Santa Claus, the Tooth Fairy, and a government that cares about its citizens...at least, the ones that are already rich and powerful.

2. The nonpartisan Congressional Budget Office predicts that the budget deficit will grow to $407 billion this year, a jump of $246 billion from 2007. Read about it here. The story attributes the huge jump in the deficit to "a substantial increase in spending and a halt in the growth of tax revenues." Wow. What a surprise.

Yes, if you are running the government, you can cut taxes on the wealthy, spend countless billions on a useless war in Iraq, dismantle the regulatory structures that used to protect the citizens from outrageous economic activity, and rescue the greedy bastards who have ruined the economy...and still maintain the fiction that all is well. As Mel Brooks so well said in The History of the World, Part I: "It's good to be the king!"

If you're not mad as hell, there's something wrong with you. If you aren't letting your elected reprehensives know you're mad as hell, they'll keep right on ignoring the problems of the average American and running the country into the ground.

Do you have any idea what we could do with 407 billion dollars? What we could do with the 23.9 million dollars the disgraced CEO's of Fannie Mae and Freddie Mac are getting? The crumbling infrastructure we could repair? The schools we could adequately fund? The essential regulatory structures we could replace? The Social Security system we could keep solvent?

If you're not voting for Bilbo's Reformed Republicratic Party, vote for Nobody. Nobody is the real candidate this year.

Have a good day. Get mad. Really mad.

More thoughts tomorrow.


Tuesday, September 09, 2008

Bilbo's Republicratic Party Platform, Plank #4: Foreign Policy

Today we continue with the platform I wish one of our political parties would adopt. The usual disclaimer applies: I don't pretend to have all the answers, but I think my ideas are good and I welcome your constructive comments. If you like what you read, why not send the URL to your elected reprehensives and the candidates for president so they can get some fresh ideas rather than the same old political caca de toro. Let's look at a realistic foreign policy for the 21st century.

Current management philosophy says you have to have a "vision statement" that encapsulates your desired goal. The vision statement for Bilbo's Reformed Republicratic Party's foreign policy is simple: "A prosperous America within secure borders, enjoying peaceful relations with all nations." Starting from this vision, here are the planks of my foreign policy platform:

1. Put America's Interests First, but Always Take the Legitimate Interests and Concerns of Other Nations Into Account. American foreign policy should be made in Washington, not Pyongyang, Moscow, Tel Aviv, or anyplace else. But while our interests need to drive our policy decisions, we will improve our international relations by accommodating the concerns of other nations as much as possible.

2. Lead by example.
One of our biggest problems today is that our actions in the international theater do not match our rhetoric. For instance, we maintain an extralegal prison at Guantanamo while hectoring other nations about abuse of human rights. Yes, many of the people at Guantanamo are evil bastards who deserve whatever they get, or worse. But the fact remains that we appear hypocritical in the eyes of the rest of the world. "Do as I say, not as I do" is a pretty poor excuse for a policy.

3. Be a Good Friend and a Terrifying Enemy. Nations who wish us well and want to live in peace should know that America is always on their side, extending the hand of friendship. Those who don't should know that we can make hell seem like a good thing.

4. Follow the Golden Rule. No one has ever improved on "Do unto others as you would have them do unto you" as a general rule of conduct. It applies in foreign affairs as much as in interpersonal relationships.

5. Call a Spade a Spade, Not a Pointy Shovel. This goes along with #1 above - if our conduct is above reproach, there's nothing wrong with excoriating those whose conduct isn't. If another country or ruler acts in an outrageous manner, don't issue bland statements that their conduct is "unhelpful"...call them what they are.

6. Level With the American People. Americans are dumb, but they aren't stupid. Our leaders have an obligation to explain our foreign policy to us in clear, understandable, and rational terms. Don't couch it in quasi-religious terms or messianic views of America's role in the world. Level with us. Explain what you want to do and why. And pay attention to what we say.

7. Focus Foreign Aid on Economic and Humanitarian Needs Before Military Ones. Most nations would benefit more from improvements in health, agriculture, and economic stability than from a bigger military which all too often turns its might inward. Severely restrict military aid in favor of "soft" aid.

8. Rely on Diplomacy to Resolve Problems Before Taking Military Action. We have the world's finest armed forces, and shouldn't be afraid to use them...but we should use them only as a last resort. "Regime change" may be a desirable thing, but the people living under the regime ought to change it themselves, not have change imposed from outside.

9. Rethink All Existing Alliances and Scrap Those No Longer Needed. One of the things which fueled the rise of Putin's New Russia was the expansion of NATO after the fall of the Soviet Union. While this might have been useful from the perspective of former Soviet satellites, it aggravated Russia and bred grievances that have now come home to roost. George Washington, in his farewell address, warned against American involvement in "permanent alliances." We need more Georges with his wisdom and foresight. He was right in the 1700's and he's right today.

These are the planks of my foreign policy platform. What do you think? Your comments welcome.

Have a good day. More thoughts tomorrow.