Easterbrook on the "Bailout"

Update 10-2-08:

Here's a picture that sums up how I really feel about the "bailout":



A number of people have asked me what I think of the Wall Street "bailout" (that hasn't happened yet.) I'd love to take the time to write out exactly what I think, but

1.) I'm not an economist, so, ultimately, who cares what I think? and
2.) As evidenced by my not blogging of late, I really don't have the time.

However, Gregg Easterbrook is an economist, and a damn good one who also has the common courtesy to both make sense and communicate clearly. So, as an economist, he added a note about the "bailout" to this week's Tuesday Morning Quarterback, his weekly football column at ESPN.com's Page 2. Since it pretty well sums up what I'm thinking, and comes from someone who - unlike yours truly - actually knows something about economics, I thought I'd share it with whoever still drops by from time to time to make sure I'm still not writing:

As Congress continues to debate whether they are going to hand over $700 billion of your money to the wealthy who screwed up Wall Street and the banking industry, you will be relieved to learn that top executives of the bailed-out firms temporarily will be limited to a strict $500,000 a year in tax-subsidized income. Surely you receive $500,000 a year in tax-subsidized income, don't you? Anyway, supposing we assume the bailout is required, here is what bothers me about the plan so far: Taxpayers don't get stock, what they get is warrants that can be exchanged for stock, and nonvoting stock to boot. This means that once media attention switches to the next crisis that everyone will claim in retrospect to have seen coming, the Wall Street rich can quietly lobby to have the warrants never called, thus keeping the entire bag of gold for themselves. Even if the warrants are called, taxpayers get no voting positions -- meaning the boards of directors of the bailed-out firms can do anything they damn please with taxpayers' money.

A week ago, Warren Buffett rescued Goldman Sachs by injecting $5 billion in capital. Did Buffett bargain for warrants that can be exchanged at an unknown later date for nonvoting shares? No: He is not a fool. Buffett gave Goldman Sachs $5 billion in return for senior preferred stock, the kind that votes and also is more valuable than ordinary shares. That is to say, he used his money to buy something. Goldman can now employ the cash to fix its liquidity problems. The United States Congress and the White House should use the public's $700 billion to buy something, namely senior preferred shares. Why are Congress and George W. Bush not simply following the road map laid out on this problem by the smartest investor of our era? Either Congress and the president are a bunch of blithering fools -- or what they actually want is to insure the public's money is never seen by the public again.

Unless the average taxpayer gets something of significant value for any bailout, this is nothing less than a reverse Robin Hood scheme, a stealing from the poor and the middle class to give to the rich, who the government has decided have an inalienable right to be rich, even when they invest foolishly and recklessly.

That doesn't mean that the government should do nothing. It just means that whatever is done should first and foremost aid the general public, whose funds are being used here.

I've got more to say, of course, but I need to put Adam to bed now. So, back to my regularly scheduled life.

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Update: 10-1-08, 11:39 AM

Here's an article on a much better plan, being floated by George Soros.

Blog Update

I will once again be taking an indefinite blog hiatus, as all of my energies at present are being devoted to:

a.) family, and

b.) my thesis.

The thesis is in need of major work, and is due by December.

The family is also in a time of transition, as Sami, Adam and I are once again expecting a new baby. I haven't blogged on the pregnancy yet, because, as you know, it comes after a miscarriage, and, as you don't yet know, it has been complicated. This has thus far been a high-risk pregnancy, but thankfully, as it progresses, the risk has been minimized.

However, with so much work to do on the thesis, with caring for Adam and being with Sami through this physically and emotionally trying pregnancy, I simply can't keep up with this blog. I will undoubtedly keep putting some thoughts together here from time to time - especially if something from the thesis can be edited down for this format. But such posts may well be infrequent at best.

You can't tell me someone from Georgia...

doesn't know the racist overtones of the word "uppity."

Here's a quote from Rep. Lynn Westmoreland (R-Georgia):

Just from what little I’ve seen of her [Michelle Obama - CB] and Mr. Obama, Sen. Obama, they're a member of an elitist-class individual that thinks that they're uppity.

Republicans have been flirting with the "uppity" image for a while, I just never thought that one of them would be brazen enough to actually use the word, use it on the record, and then clarify that yes, in fact he used it and meant to use it.

That's some racist shit.

Republicans to the Obamas: Get back in your place!

[Note: This post was typed while chillin' to Stevie Wonder's Songs in the Key of Life. By the time "Black Man" came on, I just knew I had to post on this.]

Oops! Talking Points Preemptively Destroyed

I'll bet Joe Scarborough and Pat Buchanan wish someone had leaked them Sen. McCain's choice in a running mate before they accidentally told the truth and preemptively ruined the Republicans' perfectly good talking points like this:



Just another example of John McCain's YouTube problem (which is evidently not limited to John McCain).

The Politics of Drinking Beer?

I like beer as much as anyone should. Possibly a great deal more than anyone should. So much that, I've noticed recently, in the last two months or so I've written four posts on beer for the new Beer of the Week series (and I might have written a great deal more, if I weren't afraid of running out of beers by Christmas!) and only two on theology.

I've even got a philosophy of beer, which is gradually being unveiled here. I've thought seriously about the ethics of beer. I'm pretty sure I could even come up with a theology of beer - with so many monastic beers available, that shouldn't be too hard, right? But even I think that introducing discussions of beer into American politics is more than a little inane.

It wasn't the footage of Sen. Hillary Clinton washing a shot of whiskey down with a mug of beer that got me, though I could have done without that image. When I'm looking for the qualities of a good president, somehow "beer-drinking-buddy" doesn't make the list.

No, what really got me was this. Evidently, in the first interview that Barack Obama and Joe Biden gave in their transition to the general election, Sen. Obama actually had to defend his beer drinking. And not against attacks of drinking too much, which would, of course, be a trait we'd definitely not want in a president.

Rather, it seems CBS interviewer Steve Croft, working for their flagship 60 Minutes program, set a new standard in journalistic excellence, saying, according to Mark Silva:

But you tried really hard to reach these people [blue collar workers - CB]. You went and sipped beer, which I know you don't particularly like - I mean you even...

At this point, Sen. Obama cut him off. As Silva relays the story:

"Steve, I had a beer last night,'' Obama interjected. "I mean, where do these stories come from, man?"

"I'm the one... [that] doesn't drink," Biden added.

"Where does the story come from that...I don't like beer? '' Obama asked. "C'mon, man."

Don't you think the American public deserves better than having our election coverage devolve into a discussion of whether or not a presidential candidate drinks beer? As Barack Obama put it, C'mon, man. Is this really the best we can do?

This Made Me Smile

Sometimes I get downright hostile when I see gas-guzzling vehicles that serve absolutely no purpose. As, say, the giant SUV, luxury full-sized sport sedan, or turbo-charged racing machine passes me like I'm standing still, I flash back to my childhood, when I would pretend the headlights on my parents car were Bond-gadget-esque rocket launchers. Ahhh... those were the good ole days, when you could fantasize about unspeakable acts of violence without worrying about the psychological and ethical implications (*sigh*).

So when I saw this comic from xkcd, it made me smile:



Life's all about the simple pleasures. Like adolescent fantasies of small-scale, grass roots eco-terrorism.