So: that's where we are. As to what can be done, it may not matter. That is, it's important what we do, but the chance that it will be done sanely and rationally is very small. What will be done must be decided by the most unpopular Administration in nearly a century in connection with the most unpopular Congress in history; and everyone involved in finding a remedy was in one way or another a part of creating the mess. By everyone, I mean everyone: the Administration, the Treasury, the Congress under Carter and Clinton, Congress under Reagan and Bush, Congress controlled by both Democrats and Republicans, the regulatory agencies, and the "experts" now out of jobs who will be hired to manage the new institutions that will be set up to buy bad debts: every one of them. What will be done will be settled by politics, not by economics.That Jerry Pournelle, he sure is a smart guy for a rocket scientist. You should go read the whole article.
(H/T to The Smallest Minority.)
12 comments:
Yeah, the experts will create a bust that'll be 10 times greater than what would happen if it was left alone, and there won't be a market left to correct itself when they're done.
Experts. My career life has been royally mishandled by experts one after another, and the only good things I've had make out were ones that were stupid idiot decisions on my behalf. About time the rest of the nation also learned what happens to your money and its flow once you decide that you're too inexperienced to decide on your own, that you'll trust an expert with eons of experience.
Ayup. I'm a-buyin' some silver this weekend, not that it'll be enough....
Oldsmoblogger-OOh, silver bullets?
Actually, Jerry's PhD is in - brace yourself - psychology.
He just writes about rocket science. :)
And four fifths of them who stand will be elected again.
Funny, I wonder how much of the success of our constitution is the result of free land, sound money, and the ndustrial revolution all coming together here during the 19th century.
Does he use the phrase, "On the gripping hand" at any point during the article?
TANSTAAFB
There ain't no such thing as a free bailout.
Sad part is WE will end up paying, while the guilty get richer... Hell with the silver, I'm ordering more .45 and .308 ammo, at the going rates, it will be worth MORE than silver!
Wow, all that you are AND you read Pournelle! Wow! Just wow!
Buy the MOAB under these conditions:
1. Freeze the Budget. (That includes all .gov salaries until the debt is paid off.)
2. No more pork barrel spending and reign in all current and unecissary spending.
3. No more .gov guarantees. And yes, FDIC, I'm looking at you. If banks/financial institutions want to insure thier clients, let them buy insurance. No more free ride from the tax payer.
4. .gov takes control of the failed institutions only until the debt incurred is paid off, then shut it the fuck down. Your business model failed, you don't get a second chance and your share holders lose their investment and the BOD's and and CEO's salary's are fixed at a reduced rate. You get to live on a budget like the rest of America. They also lose their bonus's and golden parachutes. You don't get to quit your job until the debt is paid, then you will be discharged. No Moonlighting either. That or go to prison for fraud. Your choice.
5. All money recieved by politicians from FRE & FNM will be returned to the treasury and they will resign for exhibiting greed, using poor judgement and betraying the public trust.
6. There will be zero .gov oversight since that is what got us here in the first place. Crunch the numbers, put in a time table it will be paid off and stick to it. For every quarter that the unpaid balance goes over the deadline, Congress' pay is decreased by the current cost of living. Every quarter until it is paid off, then that ending pay is your start salary going forward.
That should take care of the incentives.
The current plan that Bush is pimping looks exactly like what got us here in the first place. No buyout without reform. Period.
I'm content to let it crash and burn and go through one nasty but short lived Great Depression rather then the MOAB without strict reform.
Next up, FICA...
db
I really like what you post in your blog. Mostly.
What will be done must be decided by the most unpopular Administration in nearly a century in connection with the most unpopular Congress in history; and everyone involved in finding a remedy was in one way or another a part of creating the mess. By everyone, I mean everyone: the Administration, the Treasury, the Congress under Carter and Clinton, Congress under Reagan and Bush, Congress controlled by both Democrats and Republicans, the regulatory agencies, and the "experts" now out of jobs who will be hired to manage the new institutions that will be set up to buy bad debts: every one of them. What will be done will be settled by politics, not by economics.
F***! He's right. What I've seen in the media so far, both from the talking heads and the (spit) politicians they cover, has been "blame game". It's pretty friggin' hard to fix a problem - and stop it happening again - without understanding exactly what caused it in the first place. Unfortunately, this seems to be that last thing that the Congress and media (spit! spit!) are trying to do.
To a certain extent, this is why the proposal to place all this SOLELY in the hands of the SecTreas without the possibility of Congressional or judicial review actually makes sense. Paulson is an investment banker with an MBA from Harvard Business School, so we may assume that he understands the banking industry, markets, and monetary policy reasonably well, and CERTAINLY better than the average member of Congress. Further, Paulson isn't running for perpetual reelection, so he's less likely than a member of Congress to be influenced by a lobbyist with a briefcase full of cash... er, campaign contributions. Hence, it is more likely that Paulson will arrive at his decisions in a rational manner than it is that the Congress will. Further, the Congress, especially Dodd, Frank, and Schumer, helped engineer this damned mess; Paulson is relatively late on the scene and hence has no reason to try to keep the current system afloat either to continue to cater to some constituency or to cover his tracks.
This is not to say that I support giving so much power to the SecTreas. It's bloody undemocratic and relies on having a SecTreas who DOES know what he's doing. Paulson may; I don't know. But I'm pretty damned sure that future president will pick an unqualified fool or political hack who WILL abuse the power and screw things up again, and there won't even be the slim hope that the Congress will be able to stop him.
Bah.
I'm increasingly inclined to oppose the bailout and let the chips fall where they may.
"...It's pretty friggin' hard to fix a problem - and stop it happening again - without understanding exactly what caused it in the first place."
Yes, it is. However, consider this; willful denial.
Think about that.
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