I've already outlined my misgivings about this bail-out package, but there is one thing I haven't mentioned. If you put aside all the technicalities there is still the matter of the psychology of the economy.
Over and over I have heard that the ultimate goal of this bail-out operation in to "restore confidence in the market."
That means the project has the potential to be merely symbolic. This was the argument for passing it right away in it's original form: that it doesn't matter what the package contains, so long as it appears to be a big move that will "restore confidence."
But the market psychology is the sum of a nation of individuals. And right now, those individuals are protesting, and not embracing this operation with open arms.
So answer me this, can congress confidently say that this bitter medicine will restore confidence if the people to whom confidence is being restored don't want it?
I think whatever congress passes will have to make at least one large noticeable difference to prove its efficacy. Otherwise I'm afraid the market will remain sceptical. I know I will.
Monday, September 29, 2008
Sunday, September 28, 2008
Friday, September 26, 2008
Obama, McCain Debate
I anticipate adding an entry here, but in the mean time here is the NPR summary of the first presidential debate for anyone who missed watching it tonight.
It's the Economy, Dumbass
Unless you’ve spent the last year lost in the arctic wilderness, or comatose, you will have probably followed the gradually mounting economic turmoil in New York and around the country. If you missed it, though, President Bush gave a completely useless Presidential Address, apparently aimed at the nation’s sixth-graders, telling the story of how we got to where we are now and announcing that something must be done. And then he walked off stage.
Notably missing from his address were answers to everyone’s most pressing questions: How much power will be conferred to the position of Treasury Secretary (an appointed position), and will there be oversight? Is buying bad debt really the only option? What will this do the national deficit in the long term? Will there be salary caps on CEO pay? How will this benefit ordinary Americans?
Yesterday, talks at the White House (which hopefully addressed some of the above concerns, amoung others) ended with no decisions, although Mr. Bush optimistically predicts that a deal will be passed anyway.
And then we went to sleep last night to news that JPMorgan Chase plans to purchase Washington Mutual after the FDIC seized it, just another in a growing list of failing banks and finance houses.
So, perhaps the invisible hand needs… a hand.
Despite some opposition (though ironically not from anyone in the “conservative” republican party) most people have conceded that this is, in fact, true. But in what way ought we to intervene? $700 billion taxpayer dollars to buy bad debt and hand out huge severance packages (as the original package prohibited any caps on CEO pay) is not, in my opinion, the way to go. And what about those unanswered questions?
According to the original package, Treasury Secretary Paulson would be given complete control over the bail-out package, and his actions would be “unreviewable.” You read it right, unreviewable. Apparently this administration learned a lesson from the failure of Alberto Gonzales’ “un-recall-able” tact.
And no, buying bad debt is not the only option. Thankfully congress is already planning on buying preferred stock in troubled companies, which can later be sold after the crisis abates. Another option is to take potentially bad assets as collateral against government loans. Companies are still obliged to pay back the loans, but it is they, and not the taxpayer, who is left holding the bag if/when those assets fail.
Still, a lump-sum bail-out would instantly multiply the national deficit, further endangering the value of our currency, and make us increasingly vulnerable to the whims of Sovereign Wealth Funds.
How will this benefit ordinary Americans? Well, we’ll be able to keep buying things we can’t afford. But economic growth that depends too much on a credit market is not actual growth, it’s future growth. The numbers are not real today, they are anticipatory. That is why, in my opinion, a recession might be better in the long run. As with oil prices, less availability of credit will mean fewer people use credit, and honestly, maybe that’s a good thing.
For more on the economy, read WWV’s entry Financial Crisis.
Notably missing from his address were answers to everyone’s most pressing questions: How much power will be conferred to the position of Treasury Secretary (an appointed position), and will there be oversight? Is buying bad debt really the only option? What will this do the national deficit in the long term? Will there be salary caps on CEO pay? How will this benefit ordinary Americans?
Yesterday, talks at the White House (which hopefully addressed some of the above concerns, amoung others) ended with no decisions, although Mr. Bush optimistically predicts that a deal will be passed anyway.
And then we went to sleep last night to news that JPMorgan Chase plans to purchase Washington Mutual after the FDIC seized it, just another in a growing list of failing banks and finance houses.
So, perhaps the invisible hand needs… a hand.
Despite some opposition (though ironically not from anyone in the “conservative” republican party) most people have conceded that this is, in fact, true. But in what way ought we to intervene? $700 billion taxpayer dollars to buy bad debt and hand out huge severance packages (as the original package prohibited any caps on CEO pay) is not, in my opinion, the way to go. And what about those unanswered questions?
According to the original package, Treasury Secretary Paulson would be given complete control over the bail-out package, and his actions would be “unreviewable.” You read it right, unreviewable. Apparently this administration learned a lesson from the failure of Alberto Gonzales’ “un-recall-able” tact.
And no, buying bad debt is not the only option. Thankfully congress is already planning on buying preferred stock in troubled companies, which can later be sold after the crisis abates. Another option is to take potentially bad assets as collateral against government loans. Companies are still obliged to pay back the loans, but it is they, and not the taxpayer, who is left holding the bag if/when those assets fail.
Still, a lump-sum bail-out would instantly multiply the national deficit, further endangering the value of our currency, and make us increasingly vulnerable to the whims of Sovereign Wealth Funds.
How will this benefit ordinary Americans? Well, we’ll be able to keep buying things we can’t afford. But economic growth that depends too much on a credit market is not actual growth, it’s future growth. The numbers are not real today, they are anticipatory. That is why, in my opinion, a recession might be better in the long run. As with oil prices, less availability of credit will mean fewer people use credit, and honestly, maybe that’s a good thing.
For more on the economy, read WWV’s entry Financial Crisis.
Wednesday, September 24, 2008
Comments
I responded to Thyrston's post Reach for the Stars about choosing a major.
I also responded to WWV's (World Wide Viewer's) entry about gas prices. I recommend that anyone interested in what's going on in the economy today to read his blog, My Blog and Other Information.
I also responded to WWV's (World Wide Viewer's) entry about gas prices. I recommend that anyone interested in what's going on in the economy today to read his blog, My Blog and Other Information.
Monday, September 15, 2008
T. Boone Pickens has a Bone to Pick
T. Boone Pickens may not be the typical profile of an energy policy reformist, but like him or not, he is leading the way to the energy of the future; if only Americans would follow.
Pickens, born in 1928, heads the BP Capital Management (named for him, and unrelated to British Petroleum) and is ranked the 117th richest person in America. He is well known as a takeover giant, having orchestrated the purchase of a number of what he considered "undervalued" oil-and-gas companies in the 1980's. In short: he's an oil man. And he's also a politically active republican, providing support to the Swiftboat Vets, a group made infamous during the 2004 presidential campaign by their (unsubstanciated) claims against John Kerry regarding his service in Vietnam.
This election cycle he's putting his two cents in again, opposing the move toward off-shore drilling that was first advocated by the republicans and which the democrats have spinelessly conceeded to.
In July of this year, breaking with the republican party line, Pickens unveiled the Pickens Plan, a comphrehensive energy policy reform proposal encouraging the use of alternatives to oil. Amoung them: wind, clean(er) coal, and natural gas. The man and the plan are the cover story of the September issue of Texas Monthly. The author, Skip Hollandsworth, was on KERA's Think today, Sept 15th. To listen to a podcast of the show, go to Think and click There Will be Boone.
I'm glad to hear this man, a wealthy Texas oil-man no less, speaking sanely. I've heard democrats and republicans, pundits and analysts telling me that the problem is "we are too dependant on foreign oil. " But that is not problem. The problem is that was too dependant on oil. We should be investing in the energy of the future. Off-shore drilling would take a decade to contribute to our national reserve, and if we are still wholly dependant upon oil, no matter where it came from, in 2018, we will have been left so far in the dust there will be no hope to catch up with rest of the world.
Pickens, born in 1928, heads the BP Capital Management (named for him, and unrelated to British Petroleum) and is ranked the 117th richest person in America. He is well known as a takeover giant, having orchestrated the purchase of a number of what he considered "undervalued" oil-and-gas companies in the 1980's. In short: he's an oil man. And he's also a politically active republican, providing support to the Swiftboat Vets, a group made infamous during the 2004 presidential campaign by their (unsubstanciated) claims against John Kerry regarding his service in Vietnam.
This election cycle he's putting his two cents in again, opposing the move toward off-shore drilling that was first advocated by the republicans and which the democrats have spinelessly conceeded to.
In July of this year, breaking with the republican party line, Pickens unveiled the Pickens Plan, a comphrehensive energy policy reform proposal encouraging the use of alternatives to oil. Amoung them: wind, clean(er) coal, and natural gas. The man and the plan are the cover story of the September issue of Texas Monthly. The author, Skip Hollandsworth, was on KERA's Think today, Sept 15th. To listen to a podcast of the show, go to Think and click There Will be Boone.
I'm glad to hear this man, a wealthy Texas oil-man no less, speaking sanely. I've heard democrats and republicans, pundits and analysts telling me that the problem is "we are too dependant on foreign oil. " But that is not problem. The problem is that was too dependant on oil. We should be investing in the energy of the future. Off-shore drilling would take a decade to contribute to our national reserve, and if we are still wholly dependant upon oil, no matter where it came from, in 2018, we will have been left so far in the dust there will be no hope to catch up with rest of the world.
Friday, September 12, 2008
Updates
I left a comment on CEC's blog regarding Sarah Palin's stance on sex-ed and abortion.
I also left a comment for Mrs. John Mayer regarding her post on the universality of sports.
I also left a comment for Mrs. John Mayer regarding her post on the universality of sports.
Wednesday, September 3, 2008
Palin Pounds Back
Alaska governor Sarah Palin gave a land-mark address to the Republican National Convention tonight as the first ever female republican vice-presidential nominee. You may remember that there was once a female democratic VP nominee, Geraldine Ferraro, attached to the dismal failure that was the 1984 Walter Mondale ticket. As a woman I am at least a little pleased to see another woman who’s made it onto a national ticket. But that is as far as my loyalty to my gender goes. I did not support Hillary for president based on her gender either; I’m interested in the issues.
For me, it is a simple litmus test, and Palin doesn’t pass. I am a fiscal moderate, maybe even a fiscal conservative, but I am a staunch social liberal, and I vote on social issues. I will never vote for any candidate who is not pro-choice, and who does not support gay-marriage.
And Palin is more extreme than most: she even opposes abortion in the case of rape or incest, which are acceptable exceptions for most anti-abortionists. Her extremely right-wing stance on sex-ed, creationism, censorship, and global climate change are shocking. Read more at thinkprogress.org.
Moreover, her record as a “maverick,” which appears to have been a major selling point in her selection for VP, doesn’t hold up well to further scrutiny. On All Things Considered yesterday Elizabeth Arnold reports on her 20 months as governor of Alaska.
Never-the-less, you have to hand it to her: she delivered a knock out speech. Expectations were incredibly high given the continuous dribble of embarrassing revelations about her personal life, and she delivered. With sharp, dry wit and a comedic timing strangely reminiscent of Tiny Fey she delivered jab after jab at democratic her rivals Obama and Biden. Applause answered her as she slyly remarked that “this is a man who has authored two memoirs but not a single major law or reform — not even in the state Senate.”
Peels of laughter rang out through the hall as she asked:
“But when the cloud of rhetoric has passed ... when the roar of the crowd fades away ... when the stadium lights go out, and those Styrofoam Greek columns are hauled back to some studio lot — what exactly is our opponent's plan? What does he actually seek to accomplish, after he's done turning back the waters and healing the planet? The answer is to make government bigger ... take more of your money ... give you more orders from Washington ... and to reduce the strength of America in a dangerous world.” (Official Transcipt )
Commentators on ABC called her “one tough cookie” as she left the stage, and they were right. If Obama wasn’t already regretting passing over Hillary Clinton as his VP/attack dog, he surely is regretting it now.
For me, it is a simple litmus test, and Palin doesn’t pass. I am a fiscal moderate, maybe even a fiscal conservative, but I am a staunch social liberal, and I vote on social issues. I will never vote for any candidate who is not pro-choice, and who does not support gay-marriage.
And Palin is more extreme than most: she even opposes abortion in the case of rape or incest, which are acceptable exceptions for most anti-abortionists. Her extremely right-wing stance on sex-ed, creationism, censorship, and global climate change are shocking. Read more at thinkprogress.org.
Moreover, her record as a “maverick,” which appears to have been a major selling point in her selection for VP, doesn’t hold up well to further scrutiny. On All Things Considered yesterday Elizabeth Arnold reports on her 20 months as governor of Alaska.
Never-the-less, you have to hand it to her: she delivered a knock out speech. Expectations were incredibly high given the continuous dribble of embarrassing revelations about her personal life, and she delivered. With sharp, dry wit and a comedic timing strangely reminiscent of Tiny Fey she delivered jab after jab at democratic her rivals Obama and Biden. Applause answered her as she slyly remarked that “this is a man who has authored two memoirs but not a single major law or reform — not even in the state Senate.”
Peels of laughter rang out through the hall as she asked:
“But when the cloud of rhetoric has passed ... when the roar of the crowd fades away ... when the stadium lights go out, and those Styrofoam Greek columns are hauled back to some studio lot — what exactly is our opponent's plan? What does he actually seek to accomplish, after he's done turning back the waters and healing the planet? The answer is to make government bigger ... take more of your money ... give you more orders from Washington ... and to reduce the strength of America in a dangerous world.” (Official Transcipt )
Commentators on ABC called her “one tough cookie” as she left the stage, and they were right. If Obama wasn’t already regretting passing over Hillary Clinton as his VP/attack dog, he surely is regretting it now.
Tuesday, September 2, 2008
a new generation
There is something to be said for the freedom of an personal blog, to be sure, but I have decided against it none-the-less. I want to write about "the issues." So I plan to post links to podcasts of great NPR shows and other worthy sources (read: BBC rather than FOX) and write responses. Our local station, KERA 90.1, and NPR as a whole, have been a beacon to me in dark times; a clear, intelligent voice sounding through the fog of mass media. Let this be my tribute, then.
Subscribe to:
Posts (Atom)
