Wednesday, September 24, 2008

Repost from People that Know More

I'm wiped out from four straight days of kids, including my nephew who came over to spend the night Saturday and game into the wee hours (He didn't last against a marathon gamer such as I Myself). Needless to say, I was quite the busy body. Except when I was feeling shitty and couldn't get a damned thing done (and I feel it coming on again, which makes me glad I can schedule posts).

We watched much Star Wars, tore up some demons and undead in Diablo II, played outside, played inside. I neglected to clean and do paperwork, tried to start another grease fire and had to pull the boy out of the pond when the little shaver got in trouble, although neither he nor I panicked (although my parents kid of did). So now that I've got the vinyl records sorted (don't believe me, peep the pics), I'm going to take a break. But I got my email from the Heritage Foundation today, and it has their principles to manage the bailout. Discuss amongst yourselves:

Eight principles for bailouts

Now that a massive bailout of Wall Street is being debated, Heritage Foundation economic experts have laid out eight goals and strategies for lawmakers to keep in mind as they evaluate the proposed legislation.

  1. Do not prop up failed or failing institutions. Government should not try to keep failed businesses afloat; instead, as with Bear Stearns, they should "ensure that they are restructured or wound down in a way that does not cause undue disruption in the financial system as a whole."
  1. Do not try to support prices. "Policymakers should not attempt to keep stocks or housing prices from falling to their proper market-determined levels."
  1. Do not allow the government to become the permanent "owner of last resort." Any assets the government buys should be disposed of as expeditiously as possible.
  1. Strictly limit legislation to the immediate need to stabilize the financial situation. "Lawmakers should oppose any and all attempts to expand the legislation being proposed" into a bonanza for special interests or pet liberal causes.
  1. Avoid "moral hazard." Policymakers must discourage others from seeking government support by ensuring businesses receiving taxpayer funds have "skin in the game" and suffer the consequences of their miscalculations.
  1. Carefully define the Fed's role. The Federal Reserve must avoid "unwarranted mission creep" as it exercises its "lender of last resort" responsibilities to ensure liquidity.
  1. Limit taxpayer exposure and keep actions temporary. "Any new mechanism or authority to halt the deterioration in the market should ensure that affected firms pay a cost and be strictly limited in time and scope to minimize taxpayer exposure."
  1. Assure liquidity in markets but require full pricing of government insurance. As it considers providing insurance to money market funds, "the Treasury must ensure that the price of that insurance fully reflects the market risk."


Obob said...

I saw the turntable and remembered mine is broken. I have a stack of vinyl that needs some dire attention.

Toad734 said...

Now there you go bringing common sense into the equation. This is Washington we are talking about. There should be one last point on that list: Who ever the moron CEO was who bought loans given to homeless people shouldn't get a severance bonus, he should return last years salary and we should liquidate his assets to help lessen the financial burden of the company or if it comes to down to it, the tax payer. None of those fuckers should get/stay rich after what they did. That is the reason shit like this happens, they get rich no matter what happens to the company, why should they care.

Maybe the best idea would be just to let everyone who got a loan in the last 8 years to be debt free. Let’s use this money to alleviate the money owed by the homeowners not the lenders who make millions. Imagine what our economy would do if everyone had and extra $1000 per month to spend into the economy. Sure, rich people, millionaires and rich corporations would go under but it would alleviate credit fears without the people having all that liability. So those companies go under, a new one will spring up in its place looking to give credit to all the people who now own property but have no mortgage debt. That and or telling everyone to go fuck themselves is probably the best approach.

I don’t know, I am just rambling. I hope I am not starting to sound like Mikes America with all this babbling

shaw kenawe said...

I haven't been to Mike's America for weeks. Reason? He calls everyone who is not on his side a Commie.

At least here, Patrick just calls us wankers. That I can deal with.


Patrick M said...

Obob: Found a USB turntable on Just an idea.

Toad: I specialize in common sense. I actually don't mind having a cap on CEO salary if they're going to get on the government tit. I doubt wiping out an assload of personal debt and collapsing a significant part of the market will solve the issue, but there's got to be a happy medium between that and a bailout.

Also, you sound like you with all your babbling.

Shaw: Thanks, you commie wanker. ;)


BB-Idaho said...

Gotta agree with S. Kenawe. Mike's attitude doesn't gain many
converts...Heritage's eight point plant can be reduced to one: We screwed up Wall Street big time:
gives us the money with no strings.

Patrick M said...

BB: You could just drop the "blank check" talking point so I can mock you.

Did you miss point 1 - Do not prop up failed or failing institutions. ? Or are you just interested in blaming one bunch when there's enough blame to spread all around the beltway?

The point of all these points is to keep Washington from becoming further entangled in the mess, when much of the problem was caused by politics on both sides creating a situation where unprincipled shitheads could rake in the cash and have a reasonable expectation of a DC tit being flung their way.

Also you ignore the Moral Hazard point, which sounds eerily similar to this - A ban on generous payouts for "irresponsible CEOs on Wall Street." Obama warned: "There has been talk that some CEOs may refuse to cooperate with this plan if they have to forgo multimillion-dollar salaries. I cannot imagine a position more selfish and greedy at a time of national crisis. And I would like to speak directly to those CEOs right now: Do not make that mistake."

Doesn't sound like a blank check to me.

Shaw: I do listen, even if I disagree most of the time.