Monday, September 29, 2008

Random Thoughts on the Bailout From a Guy Who Hated Economics Classes

1) Market problems generally require market solutions; however, the current crisis is not a failure of a free market, it is the natural consequence of distorting a free market by encumbering it with economically unsound lending practices. If the Democrats were the only ones saying we need to “do something”, I’d discount their claims. If President Bush, alone, were saying that we’re facing an emergency, I’d take his statement with a grain of salt. But there are enough people out there whose opinions I respect saying that we have to take extraordinary action to make me believe that some kind of plan, resembling, if not identical to, the plan that was voted down today is probably necessary. There are no easy fixes, but a fix of some kind is now required. But the malefactors have to pay a price.

2) The only long-range solution to problems of this kind is to vote out the Democrats. Period. Republicans in the next few election cycles need to remember a lesson from history. Harry Truman won in 1948, not by running against Tom Dewey, but by running against the entire Republican Party and its “do-nothing” congress. Legitimate bipartisanship on a workaday basis, when it makes sense, is fine; but come election time, Republicans need to pull out all the stops and denounce the Democrats from the roof-tops. Name names, and marshal your facts, and be ever-mindful of the fact that any speech or press conference that doesn’t (a) trumpet your positive vision while simultaneously (b) damning the Democrats is a wasted opportunity. Unless the MSM decides to launch a total blackout of coverage, Republican talking points will eventually get into circulation and will have an impact.

3) Still sitting on the fence about the upcoming election? Think about the Democrats controlling the White House and both houses of congress; this would mean (a) an unfocused foreign policy marked by fundamental weakness, with sporadic outbursts of saber-rattling at the wrong time and in the wrong place; (b) a Supreme Court with a long-term liberal majority; (c) a Department of Justice in the hands of someone who is a friend of unrepentant “former” terrorists, and who has not been shy about using force to choke off debate during the presidential campaign; and (d) another shot in the arm for the intellectually moribund doctrine of socialism. God delivered the Ten Commandments to Moses, and they are with us always; but the constitution was made by man, and like everything made by man, it can be destroyed overnight, or it can be so completely emptied of significance over time that it becomes a dead letter.

Vote like your future depended on it - because it does.

Update: A principled contrary view to my first item above (H/T to Captain Heinrichs). And after listening to Karl Rove's fascinating account of the vote, I'm again wondering exactly what, if anything, is really needed in the way of government assistance. The Democrats obviously aren't serious about the bailout. According to Rove, at least five Democratic committee chairmen were permitted to vote against the bill. I think maybe I smell the aroma of BS.


the_real_jeffs said...

Yes, the future does depend on my vote. And you can count on it.

Anonymous said...

As credit dries up and starts affecting people they'll get religion quickly and that's when the message needs to be sitting there waiting to be heard.Too much time has been spent telling us how we got here, I'm interested in how we're getting out of this mess and so will most people be when it starts to hit them personally.

I count the beans for a small business and have spent tonight fine tuning the Excel sheet we keep on cash flow. Luckily we have good customers that I don't have to worry about paying up and paying on time but I've got 45 people to pay every other week and vendors who will likely be interested in seeing their money in closer to 30 days instead of the 45 days I'd like to have to pay them. I'm not counting the Line of Credit we've got in place because our bank is heavily into real estate as its' core business and that's not a good place to be these days.

In spite of that I figure we're in pretty good shape for a small operation but how many businesses like us aren't? And how long before they feel the pinch so bad they start the lay-offs because their banks don't want to know them?

One bright spot today was two of the mechanics saying they were going to vote this year (for the right party, IMHO) for sure. When I told them I could check online to make sure they were registered they crowded around the monitor to see for themselves. Even applied for an absentee ballot for one who'll be out of town on election day.


Minicapt said...

I would suggest that the crisis peaked last week, and that the current non-crash indicates that no extraordinary efforts are needed. The major problem now would be closing down on those who focussed on profiting from the run-up to the putative crash. The fact of the 40% no votes for the Dems would be evidence.


kc said...

I know a couple people who are in near-panic mode over their mortgages (Wachovia)& credit cards...because they pay for EVERYTHING with the credit card, then pay as much as they can against the balance come payday. Personally, we pay cash for everything & our mortgage is held by a credit union. Our payment is very small...& we've set things up so we can survive on much less than we have now if necessary.

We talked 5 years ago about a crunch or crash we're as prepared as one can be without being Scrooge McHermit.

Like Retread says, I'll be listening when someone comes up with a plan...but that doesn't mean the MSM goons are going to let us see it, so please let me know if you hear something in that line.

Anonymous said...

The Fed has been pumping up the money supply in an effort to keep credit from completely drying up and that's something only the government can do, so maybe that's enough intervention because they've done it before so we know it works.

It's looking like the next iteration of the bailout plan will get less support because people are having time to see that panic isn't a plan, it's just a reaction.


kc said...

So far, the market isn't tanking today...

Sky is still there...

Another indication why I don't trust "the powers that be" - if they're not blatantly lying, they're still determined to do things that aren't for the good of the People in flyover country.

What disgusting, disingenuous boobs.

bruce said...

Dems control Congress. So far this has meant little, but suddenly they seem to have found our G-spot. The whole world is watching Congress now, holding their breath. Like the expert vaudevillians they are, they're milking every last drop of applause out of us, so we will forget the previous act (Sarah who?).

missred said...

econmics 101 lost me after the law of supply and demand. "advanced" accounting principles are lost on me. what goes out must be lower than what comes in and that is how i have what i have. i made a few mistakes and it was a hard lesson to learn, but i learned. i no longer have credit cards. if i don't have the cash to get what i need or want, then i must make adjustments to my budget and spending to ensure i can obtain my needs and wants. unfortunately the credit industry has been preying on people since the 60s. i was appalled when credit agencies started sending my daughter offers before she graduated from high school (and she was only 17 at the time). living beyond our means has become the american mantra, not the american dream.
because of my lack of understanding advanced economics i am confused about this entire issue. all i know is i am not going to worry my pretty little head over my pension for i am not ready to retire and markets do bounce back, but i will have a house .. maybe not the one i wanted (the wee cottage in the highlands), and i may have to watch my pennies when i retire. so what. i don't need a maserati and designer clothes. books and my painting are entertainment enough for me. ok, and trips to scotland.

missred said...

oh and like trj said, yes the future does depend on my vote..

mojo said...

Just shoot every other banker and every third congresscritter. The rest will get reasonable.

Trust me.

Paco said...

Mojo: You mean thin out the herd? Sounds like an excellent suggestion.