Bankruptcy, Not Bailout, is the right answer

So far I've hesitated to post anything about the current financial bru-ha-ha.

Politicians are shitting in their shoes because they know that a large part of the responsibility lies squarely on their collective desk. The remainder of the responsibility lies on the heads of the financial institutions that went along with the Ponzi Scheme.

Rather than give you my poor interpretation, and knowing you might not click on a link, I am going to paste in it's entirety a commentary written by a Harvard (let's not hold that against him just yet, shall we)economist. See if it makes as much sense to you as to me.

Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.
Economist Jeffrey Miron says the bailout plan presented to Congress was the wrong solution to the crisis

Economist Jeffrey Miron says the bailout plan presented to Congress was the wrong solution to the crisis

CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.


This bailout was a terrible idea. Here's why.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.

This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.

Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.
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* Commentary: Financial crisis a disaster
* In Depth: Commentaries

The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.

Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.

If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.

The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.

Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.

So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.

The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

The opinions expressed in this commentary are solely those of the writer.

Let's burn the house down

The current crisis couldn't have been worse if somebody had planned it.

Crazy???

Running Away

"Whatcha doin'?"

"Think I'll run off".

"Where ya goin'?"

"Where ya wanna go?"

"Aruba"

"Gotta passport?"

Sigh "No".

"Neither do I."

(both) "Damn"

For BANE

Godspeed



For me

Time and old Marines march on

As a youngun I was raised on a 300 acre dairy farm 35 miles from the capitol building in Atlanta Georgia. Today you'd be hard pressed to find a working farm of even a few acres that close. Mostly it's covered in asphalt or concrete and houses.........
......every where you look there are houses, of all stripes and colors. Big and small, until the last year when the house construction industry went tits up, the once fertile land grows only houses.

Still I learned many things there, how to find pecans in the grass of our yard in the fall, how to catch a baseball thrown up on the tin roof of the smoke house, rolling off into my bare hands, or later my first baseball glove. I learned to ride a used 36 inch bicycle even though my legs were too short to reach the ground on either side (I'd lean it over on a terrace row so I could get my leg over to the peddle and push off and peddle like hell till I got to the peach orchard where I'd grab a limb over my head and let the bike wobble on 'til it fell over............then do it over, and over, and over again. Later as my legs stretched out a bit, I'd spend hours and hours riding around the big turn around in front of the milk barn where the tractor trailer with the big milk tank would come to suck up our milk along with other members of the Atlanta Dairy Cooperative, to take back to Atlanta and bottled or made into ice cream and cheese, and sold all over Georgia.

I learned to read, in part, because the Atlanta Constitution newspaper was delivered ever day..........and while my dad and mom read the more important stuff I'd keep up with the adventures of Dick Tracy, Smiling Jack, The Phantom and many other characters on the cartoon page, or multiple pages in the Sunday edition.

Eventually the Atlanta Journal and Atlanta Constitution were combined into one paper, the Atlanta Journal Constitution, which today struggles like many papers around the country to keep readership in an era when many get their news and entertainment from the TV..........and more and more.......the internet.

I long ago stopped subscribing to the paper, because they'd grown fat on the advertising pages to the point that there were almost two pages of advertising to one page of news and business. I now fall into that percentage that gets most of my news from the internet or radio while riding in my Dodge Ram.

So it surprises me a bit to be posting a link Here to an article in the paper. (I did find it online)

It concerns a gift from old Sam Magill, (gone lo these many years) longtime publisher of the paper, to the surviving members of the 1st Marine division, who stormed, and eventually, after six months of fighting and dying, took the island of Guadalcanal during WWII, of an old and expensive bottle of Cognac, to be opened by the last surviving member of the division that actually fought on that terrible bit of rock and sand sitting in the middle of the Pacific Ocean.

Read the story for yourself, think what you may about it and the members of what some have called our Greatest Generation. Maybe, like me, you'll raise a silent toast, either in your mind, or in fact, to those men, and one newspaper editor and publisher, who made a gift of a lifetime.

Out on a limb................

.......Or The Fix is in.

In 1980 I predicted that Regan would wipe the floor with Jimmy Carter after seeing a photo in the paper with David Rockefeller placing is arm across Regan's shoulders and announce "Regan's My Man".

Today a member of the Rothschild’s empire announced that she's for McCain.
As She was formally a Clinton backer I think this might be telling us something.

But then what do I know??

Call me a conspiracy nut if you must. I wear the banner with pride. If you think that people will spend a half billion dollars and more to elect a President who only makes $400,000.00 a year so that he can be in charge of things your are perhaps deluded..................

Or perhaps it's me. After all they pay me to be crazy.

UPDATE: Today it appears that Donald Trump is getting on the bandwagon.

Passion Fruit

When asked how she was doing today the young Portuguese lovely replied, "Peachy".

My mind was instantly transported to a vision of taking the first bite of the first peach of the season.

For weeks you've watched the young fruit grow from small and green to round and plump, tinted with first yellow, then pinkish, to pinkish red. You've had to restrain yourself from plucking it before it was fully ripe. Oh, they can be eaten while partly green.......but the taste is tart, almost bitter. How much better to wait..
..restraining your urges to indulge before the moment is right. Until that perfect moment, when you take the fruit into your hand, and can feel that it is firm, yet not too much so. With just the right amount of give, that indicates the flesh inside is fully ready........

You brush at the soft fuzz outside,. Not too much, you want the texture of it to remain somewhat on the flesh in order to feel it as you sink you teeth into it, feeling the skin burst, the yellow flesh yielding wetly as you press it into your mouth giving a slight sucking in order not to let any of the sweet syrupy goodness excape. But it does and as the juices run down your chin you take your fingers and wipe it up, not wanting to miss a single drop of it's peachy goodness.

Time is suspended as your senses can only process the smell,that peachy aroma that assaults your sinuses, the slippery texture of the fruit, so fully ripe that it seems to slide down your throat. The cares of the world drop away for that one perfect moment.

Just you and your peach. That's all that matters as you eat it down to the nut inside.

Never underestimate the stupidity.........

.........of people in large groups.

Every time there is the least little problem the news media makes it sound like the end times are here right now.

Yesterday gas in Athens was about $3.53........today over $4.50 and rising. All because the storm in the gulf has temporarily shut down some of the oil wells and a few refineries.

Do people not understand the words temorarily. Bejus, we're like dumb cattle being lead to the slaughter, rolling our eyes wildly and mooing enmasse.

The price of oil fell overnight to lowest price in a while and the pump price goes ballistic.

Oh what fools these mortals be.

Never forget

Never surrender, Never give up.

There will be many remembrances of the attack against America seven years ago today. Many grand and glorious statements honoring those who died. To be true there were many heroes that day. Men like the firemen and police officers who disregarding the danger to themselves, sought valiantly to get as many people out of those towers safely as possible, despite their own fear, despite thoughts of their own families, they did their duty.

I've posted before about Rick Rescorla on this anniversary day. Who knows how many lives he saved at the cost of his own. Even if it were only one, how long would it be before they forgot him ?

Yet that was only the opening skirmish of a larger and longer war than we could at that time imagine. And many people have, it seems, forgotten. We are able to go about our daily lives, most of us safely considering we get there in machines that hurtle us along at 60 to 80% of a hundred miles per hour, and on highways converge at double that speed.

We need to remember, this day especially, and every other day, the unsung heroes who daily volunteer to put their own lives and limbs on the line. Sorta like this guy speaking his heart to a presidential candidate.

Part of a healthy life style

At first when I read the linked story I thought to myself, 'He's clogging his guts up'.

Then I realized that it's just Sad.

I mean after all, a diet of Big Mac's can be a healthy lifestyle choice.........if that's all you eat. You've got your meat, bread, salad, and vegetables all in one gut packing fist full. Not too bad. Probably ought to limit the soft drinks is all. For sure, none of the diet sodas, which are full of Aspartame.

He says he's in love with the burgers, which are the highlights of his days
.

Now, I can identify with him a bit more.

Where's the chocolate bar??

Just too good, it's almost sinful

In fact I've heard that gluttony is one of the 7 chief Deadly sins.........

Not sure just who came up with the first list, but Evagrius Ponticus 4th century monk put Gluttony in first place. And he listed eight.

I'm guilty of all the rest (though not enough of the second) so might as well be perfect in something.

That being said however, is there anything edible more delicious than a warm slice off a loaf of Banana Nut Bread, with real black walnuts mixed liberally in it, real cow butter smeared atop, pinched off with your fingers so you can lick them afterwards??

Right now, I think not..........well except for the second piece which I have to try really, really hard not to go get. Made me have to get out of the slightly too snug khakis, and slip on the bull moose PJ's with the elastic waistband.

Thomas Aquinas took a more expansive view of gluttony, listing 6 way to commit that one sin.

* Praepropere, eating too soon;
* Laute (washedly), eating finely;
* Nimis, eating too much;
* Ardenter, eating burningly;
* Studiose (keenly), eating daintily;
* Forente (boringly), eating wildly.

I'm guilty of all these also.

Maybe I need to concentrate on some of the other sins more, and gluttony less. Whadda ya think?

The hazard of living too long

Whether or not you are a country music fan, this is truly

the work of a deep thinker, and highly intelligent person.

So simple, yet so profound. Words of wisdom from that

famous philosopher Willie Nelson, on his 75th birthday:





''I have outlived my dick.''.

Must of been a bit of bad beef.........

......either that or I missed a pill or two.

I mean when you start dreaming of scooping up 6 wk dead bodies in the bucket of your MF-40 as well as giving rides to what looked like Auschwitz survivors at the end of WWII, but knowing them to be forgotten MIA's........

It'll bring you gasping and clawing out of a deep sleep with a blinding hatred of governments that forgot them....or started conflict that led to it.

I'm glad I gave up on googling pictures to post on here. You don't need to have visuals.

That'll make you fear going back to sleep ever again.

Meow, meow, Grrrrrrrrrrrwwww

You know the housing market in California is going to the dog......er, Cats when a family of Bobcats take over a Foreclosure.

It's also a sign that the invasion from Mexico is slowing down, because the squatters aren't Hispanic.

If you've ever heard a male Bobcat sending out his lovesick calls in the early evening you've missed a treat. Think going into a spook house at Halloween will send chills up your spine............you don't know the half of it. Imagine being on the African Savannah setting up camp along the tree line at dusk, the sun setting in the west with a purple, red and pinkish glow, the porters have unpacked and the cook is stirring beans over the fire. Your are setting in the camp chair in front of your tent when a male panther in the tree over your head announces his displeasure at your intrusion with a loud scream, then leaps to the ground and disappears into the bush. Yeah, kinda like that.

Wildlife experts may try to tell you that we don't have panthers or cougars in the Southeast any more, but 45 years ago on the dairy farm my dad owned near Dacula, GA, we had one in the back 40 that for about a week, announced his presence about 6am every morning. Milkers would be stomped off of teats, if you happened to be washing an udder you'd be kicked and likely a sloppy tail would smack you upside the head, the cows would roll their big black eyes around in their heads and look wildly about. We found tracks in the treeline bigger than any dog in the neighborhood and no toenail prints on them. That's guaran-damn-teed to make you look around like your head is on a wind vane in a tornado. They say it's sorta like a woman screaming.......yeah, that's about right......

....like a London prostitute who sees Jack the Ripper coming.

Whirly Girl

That's a designation I first remember being applied to hurricanes by the late author John_D._MacDonald in one of his Travis McGee novels. A fitting name when the National Weather Service only used feminine names for these late summer and fall storms.

Of course now-a-days we have to be politically correct and also use masculine names.

I reckon that's OK with me.........doesn't seems to really matter. After all I have seen and heard of men who could hold a grudge with most women. I must admit though that the saying "hell hath no fury like a woman scorned", does seem to apply more generally to the fairer sex. Most guys will bluster and blow hard for a little while and then with the first rumbling of his stomach will say, "food.......me.......now" and turn his attention to that, sex or television. The more outdoorsy type will go fishing or hunting. Small flare ups may flicker behind his eyes every once in a while, but quickly smolder out as his brain can't retain the necessary focus to keep thinking of it.

It looks like Hannah might bring us a little rain either tomorrow night or maybe Saturday. That'll be OK here in the northern Piedmont of Georgia......maybe not so OK for those closer to the coast or up along the Outer Banks and the Northeastern States..

We had another East Coast brushing storm a few years ago called Hugo who's heavy rain and wind laid waste to much of the lower eastern seaboard. Much of the Damage was due to the flooding caused.

I confess to not having much of an inclination to get too close to a hurricane. I have to admit however that the clear skies both before and after the fact are some of the most beautiful I've ever seen. No haze, just crystal clear air through which from an elevation you can see forever it seems.

Even the clouds during the storms passage are impressive as they sweep counter clockwise in bands of gray, and darker almost black, that unleash rain that comes down like you are pouring water out of a rubber boot, or like the old timers used to say "like a cow pissing on a flat rock". Having been around cows most of my life I know exactly what that is like.
My paternal Grandfather once told a visitor to his dairy barn during milking time who asked how he could stand the smell, "Shoot, I've had so much splashed in my mouth I don't even taste it anymore". I come from down to earth country stock. Most of us will speak it like it is. Some better than others of course.

Anyway, I'll watch the skies for the next few days, noticing which way the birds are flying and the wind is blowing.

Hot Damn

Sarah Palin just took it to the obamassiah, spit in his face, stomped on his instep, twisted his nose and bitch slapped him on the back of his socialist head.

I may be an over the hill, over medicated, redneck country boy, but I'd get in a fox hole with her if all we had were a flip and a .22 rifle.

That Gal (as she referred to herself) has great big, shiny, brass balls. How she totes them in high heels is beyond me.

A B-E-A-utiful day in the neighbor hood

I've had my cheezy eggs and crispy bacon, the whole wheat bread smeared with real cow butter, the sky is blue and not much breeze. We'll warm up today but not too bad. It's off the enjoy the outdoors for a bit.

While I'm no deep thinker by any measure, this bit read here, causes me some reflection this morning.

"Few people think much about the Founding Fathers of the United States these days. They would be appalled, even say, I TOLD YOU SO. Thomas Jefferson warned specifically about handing over the power and authority over money to private banks, stating in clear terms that if granted, then in time the nation will lose their homes to bankers"

I do believe I'll ruminate over that one for a while.

So much Hate

Especially for someone she never knew of until a week ago.

I asked in a previous post, what the PUMA’s would do now that Sarah Palin is now the Republican VP pick of John McCain.

I think this Column for a Baltimore Sun writer demonstrates the degree of unreasoning hatred the left has for anyone who doesn't subscribe to their vision of socialist dogma.

What ever happened to the concept of fair play?

Night thoughts

I sat in the yard swing this evening, just at that late twilight time when the color is washed from the sky, when there is not a breath of air that you yourself didn't just exhale.
A rain crow or maybe a Mourning Dove was the only sound I could hear other than the soft squeak of the swing chain as I slowly swung back and forth.

Gracie, the Dalmatian bitch with one blue eye and one brown sat on the ground before me, cadging a rub and scratch on each forward swing. Poor girl, she sheds far too much to be allowed into the house, her domain rather the fenced back yard where she sleeps in one corner of the shop/storage building. In the summer she'll lounge under it in the cool gray dirt, during cooler weather she'll be found stretched out on the front porch soaking up the heat from a feeble winter sun.
When ever it is, she's always right at my side when I'm out there (or in my lap if I'll allow her) rubbing her head against me, keeping her bi-colored eyes fixed upon me, like a lonesome lover, begging me silently never to go away, yet knowing I will, and hoping I'll one day return. I always do............faithfulness should be rewarded.

Then a rice burner with angry exhausts snarls his way around the corner and down the road, disturbing the evening, and, after one last scratch and rub to the pooch, I walk heavily into the house.