Peter Ackerman and John Vogelstein - Restore TARP to Its Original The authors in the Washington Post reprise the argument for the "good bank/bad bank" structure. I am getting to the point where I can believe that is a good idea. The aspect of the proposal that is most appealing is that it is easy to understand. That is a very valuable commodity today.
Too many rich US farmers get subsidies: GAO. Duh. When I first saw this article, I was yet again amazed at more evidence that Obama is a follower of Hayek instead of Alinsky. But Greg Mankiw points out that the Obama plan will simply result in breaking up large efficient Farms into smaller ones. If Obama really wants to address the subsidy problem (or welfare problem) of farmers, he needs to eliminate all subsidies.
(posted at 9:55 am by Mike Rulle)
In his commentary, A Theory of Financial Panic Kling makes the point that the bailout was intended to free up capital by the mechanism of insuring against extreme risks. I need to read this more carefully, but the Paulson plan intellectually was intended to lower the amount of capital being posted by financial entities for unlikely events. In other words, the market was charging itself too much for insurance against low probability events. To me, this is just another way of saying that Paulson was trying to restore "confidence" in the system. As I have stated elsewhere, this is circular reasoning. Ultimately, confidence in an economic system is an act of faith.
(posted at 9:42 am by Mike Rulle)
Yesterday I asked in a post for someone to explain why the Federal Reserve is buying mortgage backed securities and direct agency debt. Well, it turns out Arnold Kling provides an answer Do I Get a Prize?. Apparently, most of the debt is already guaranteed by the Government so it really is the definition of pure arbitrage. (Imagine if you could buy back your mortgage and issue another one at 1% lower rates). The answer, while good, still does not get at the larger question as to why we are de facto imposing price controls on debt, rather than letting the market sort it out. It is going to have to sort it out some day.
(posted at 9:30 am by Mike Rulle)
Thomas Sowell takes a crack at the dangers of the mini-obsession with "CEO pay" in his retelling of the Russian Fable Ivan and Boris Again. Ivan is jealous of Boris because Boris has a goat. His lucky day comes however when a genie arrives to make any wish he has come true. Ivan wishes for Boris' goat to die. It is funny because it is so true. I cringe every time I see a company announce it's senior executives will receive no bonuses this year. To me, it is political pandering. If they think that will make people not wish for their goat to die, they will be disappointed.
(posted at 9:08 am by Mike Rulle)
A vaguely perceived irony is the Obama transition. I actually do not know what to expect from him. David Harsanyi discusses this in Maybe It Is a Time .If all one knew about Obama is what you have seen in the last 3 weeks one might think of him as a "New Democrat", , the old 1990's centrist faction of the Democratic Party. Yet just 8 months ago he ran to the left of Hillary Clinton as a McGovernite. How does one reconcile these two ideologies? More to the point, how does the sappy media not point at this obvious absurdity with a critical eye? Instead of an opportunist Obama becomes politically savvy, Lincoln and FDR all rolled into one. It is as if the entire "Intelligentsia" is in on the joke. It really is pathetic.
(posted at 9:00 am by Mike Rulle)
Brent Bozell over at TownHall brings up one of my favorite "memes": Liberalism = Genius?. It is amusing. My favorite is this exchange between Robin Roberts and George Stephanopoulus on ABC."Some would say it's a team of rivals, a la President Lincoln, or is a better comparison a team of geniuses as FDR did?" George Stephanopoulos unsurprisingly agreed: "We have not seen this kind of combination of star power and brain power and political muscle this early in a cabinet in our lifetimes." Doesn't one have to be a genius to be able to identify a genius? Maybe not, but you get the idea.
(posted at 8:35 am by Mike Rulle)
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