This is it for me, at least for this chapter. I am off to join some people who don’t much appreciate voices singing out of key, and while they might be able to get over my public disdain for coaches who punt in opposing territory, it would be rather awkward to continue to point out the incompetence of the administration. So for now, it’s probably best to hang it up.
Archive for the ‘Meltdown’ Category
Posted in Corruption, Education, Energy Policy, Health Care, Housing Crisis, Housing Policy, Industrial Policy, Inspirational, Labor Policy, Meltdown, Middle East, Miscellaneous, NAFTA, Obama, War on Terror on December 15, 2009 | 29 Comments »
I am enjoying the goings-on in Dubai tremendously. It’s like the field mouse of an economics drug trial: take every extreme symptom, jam it into one place of absolutely no global consequence, and then try to figure out the cure.
Suppose you had a tiny country that decided it wanted to be important. Playing on confusion with its oil-rich neighbors, it goes out and borrows a lot of money to build buildings. Taking the Paris Hilton strategy that if you insist on your caricature long enough others will eventually believe it, the country makes a big show of people piling into the buildings. Real estate developers, the ultimate momentum players, pile in. The country goes the offshore tax haven route – no income taxes – and throws in absolutely no labor standards to ensure that construction can proceed on whatever blistering pace can be achieved by malnourished Thais and Pakistanis welding in 115F heat. Eventually it hits the wall – for reasons completely beyond its control, at some point people look around and realize they have the world’s largest Potemkin village. There is no market. The locals are preposterously corrupt. Islam is not compatible with the hedge fund lifestyle. What then? (more…)
Short post to follow up on two things that were on Baseline recently.
First of all, take James’ advice and check out this Interfluidity post:
An enduring truth about financial regulation is this: Given the discretion to do so, financial regulators will always do the wrong thing.
In the category of a stopped clock being right twice a day, the Senate seems to have come up with a compelling piece of bank regulation. I don’t like its chances to get passed, but it would be great for the nation:
WASHINGTON — Senate Democrats circulated a plan Tuesday that would impose sweeping curbs on the Federal Reserve, posing the biggest legislative challenge to the central bank in decades and illustrating how divided Capitol Hill remains about the future of financial regulation.
The move is part of a broader 1,136-page proposal by Senate Banking Committee Chairman Christopher Dodd aimed at rewriting how financial markets are overseen. It would create a single banking regulator, a powerful council of regulators to monitor systemic risks to the economy and a Consumer Financial Protection Agency to write and enforce rules on products such as mortgages and credit cards.
This bill has a number of good ideas, and one excellent principle: the Fed should be independent, even when it doesn’t want to be. (more…)
James Kwak over at Baseline has an post about the accounting treatment of Bank of America and Fannie Mae; quoting John Hempton:
If Bank of America were to provide at the same rate its quarterly losses would be 50-80 billion and it would be completely bereft of capital – it would be totally cactus. It would be – like Fannie Mae – a zombie government property.
Hempton claims that BAC has the right recognition policy and Fannie is being crushed by regulatory conservatism. I think that’s about as likely as the Easter Bunny, but Hempton deserves credit for thinking outside the box. (more…)
I find it awfully difficult to care about county elections. Luckily, Ben Adler seems willing to look at them, and he picked up something interesting:
Unlike the New York City mayoral, or the Virginia governor’s race, there is a really bad sign for Democrats out of the East Coast:… Republicans made inroads in New York’s suburbs.
Why does this matter so much? Because the New York suburbs epitomize the new Blue America. Twenty-some-odd years ago, the economically diverse, but generally affluent, suburbs in Westchester and Long Island represented the success of the Reagan Revolution…But the New York suburbs led the way back to Democratic dominance, arguably presaging the Obama coalition.
I have written often about the strange alliance of very high and very low incomes that defines the modern Democratic party – the working class and the intellectual property class. It’s my version of “flat earth,” I suppose. So I’m a bit jealous that someone else spotted this. (more…)
Even by off-cycle election standards, this was an odd one. Perhaps it’s just payback for such a good election last year. I’ll trade watching Chris Christie do his Sopranos impression for never having had to listen to this:
It’s been just 68 days since that afternoon in Dayton, Ohio, when Senator McCain introduced me as his running mate. He is truly the maverick. He took a chance on me. I will always be grateful for that. It will be the honor of a lifetime to work him as vice president of the United States. And I pledge to govern with integrity, and goodwill, and clear conviction, and a servant’s heart.
When the Democratic Party finishes licking its wounds, I hope it learns at least one lesson: when you win an election, you are expected to do something. Asking the genie for three more wishes is not something. (more…)