David Brooks : The Big Test

"I fear that in trying to do everything at once, they will do nothing well. I fear that we have a group of people who haven’t even learned to use their new phone system trying to redesign half the U.S. economy....I worry that we’re operating far beyond our economic knowledge. Every time the administration releases an initiative, I read 20 different economists with 20 different opinions. I worry that we lack the political structures to regain fiscal control. Deficits are exploding, and the president clearly wants to restrain them. But there’s no evidence that Democrats and Republicans in Congress have the courage or the mutual trust required to share the blame when taxes have to rise and benefits have to be cut.....I have to go to the keyboard each morning hoping Barack Obama is going to prove me wrong."

http://www.nytimes.com/2009/02/24/opinion/24brooks.html?_r=1&th&emc=th

Brought to you by theYreport at y-report.com

Remembering the Free Market

John Stossel....the David Hasselhoff of intellectuals.....thank you,  thank you very much!!  Your burly mustache....impressive.  Your thoughts on Free enterprise in light of all the bailouts...utterly refreshing.  It's amazing how quickly so many are turning their backs on the core economic principle that has made this nation great.

A fantastic article entitled "Try Free enterprise" by the Stoss.

Brought to you by theYreport at y-report.com

Kierkegaard and the future of capitalism...

Deep and interesting article on economy / bailout....



An excerpt:

So much of the health of a capitalist economy resides in a seemingly intangible but obviously very real commodity: confidence, the psychological enabler of risk. The financial news has been full of stories about the “flight to safety” on the part of individuals and institutions. The irony, of course, is that the flight is only a time-buying maneuver. The “safety” sought is ultimately dependent on the dynamism of the whole, which means that today’s safe investment is tomorrow’s prelude to financial uncertainty if not, indeed, financial panic. Simple prudence may have dictated the initial flight to safety. But hoarding is both an unattractive personal quality and, ultimately, an imprudent financial strategy. There is a lot of cash sloshing around the world’s economy now. It’s time to put it back to work.

I mentioned the Danish philosopher Kierkegaard in my title. I had in mind a passage from his anatomy of despair, The Sickness Unto Death–not, I have to admit, one of the world’s cheeriest volumes. But in his description of a certain form of defiant despair, Kierkegaard says something that I think has pertinence to our current situation. The species of despair he has in mind here (for despair, like most human follies, comes in manifold varieties) shows itself as a revolt “against the whole of existence.” “It is,” says Kierkegaard,

as if an author were to make a slip of the pen, and that this clerical error became conscious of being an error . . . . [I]t is then as if this clerical error would revolt against the author, out of hatred for him were to forbid him to correct it, and were to say, “No, I will not be erased, I will stand as a witness against thee, that thou art a very poor writer.”

An unproductive attitude, I think you will agree. But does it not illuminate something about the emotional weather on Wall Street?

The FDIC Measure Everyone Suddenly Supports

Deposit Plan will Cost Banks More

William M. Isaac, who was the chairman of the F.D.I.C. between 1981 and 1985, said that lifting the limit to $250,000 is “all show, no substance.” “It doesn’t do what needs to be done,” he said. “It might make somebody’s grandmother feel good, but that is not the problem that we have in the financial world: banks won’t lend to other banks.”

New $1 Bill

Oh if only George Washington could see us now!

Not-so Free Market Capitalism

For some time now, I've heard it said from those of a very strong conservative viewpoint that Obama would move the United States of America towards socialism if elected. In my own conservative economic point of view, but more liberal social perspective, I laughed this off as an 'extreme' statement that is being used to just scare people away from the candidate they dislike.

However, in the wake of the financial crisis that has risen on Wall Street during these past few weeks, I have started to become more and more concerned that those strong conservatives might actually have some rhyme to their reason. In listening to the first Presidential debate between McCain and Obama last Friday night, I was shocked to hear Obama suggest on multiple occassions that John's view of the "markets just working themselves out" was some type of theory that was impractical in real economics. Time and time again since last Friday, I have heard and/or read democratic leaders from the house talk about how the 'old' theory of the free market won't work on it's own....that somehow 'more' (not better) regulation is the key to economic prosperity. The post on theYreport earlier today from YBS about San Fransisco banning the sale of cigarettes in drug stores is incredibly disturbing and a great example of the democratic party governing 'socialistically'. All of this is incredibly disturbing. How can we ignore all of the economic prosperity that this country has realized as a result of the application of this theory to basically dominate the rest of the world economically for at least the last hundred years?

...And there is absolutely blame to be given to the Bush Administration for supporting this, further evidicing the fact that he has fundamentally changed the definition of what it means to be a republican. Did he seriously ask the congress to pass a $700 Billion bailout bill in like 48 hours. That is more money that has been spent on the Iraq war cumulatively.....and we need to make a decision immediately. The largest single expansion of government in U.S. history should not be taken lightly and done on a night's rest. The other thing that irks me, as the politicians panic and cause additional market turmoil, is that we have regulations that are already in place that are meant to protect citizens and business' in situations like these. These regulations may need to be modified (i.e. - raising the FDIC limit), but what is actually being restored by this bailout? I will at least give W. the benefit of the doubt that his reasoning for this bailout is based on issues that have arisen due to poor regulations that forced banking institutions to give poorly underwritten loans to those that didn't have any business getting them. He is not claiming that this is a result of the failure of the free market. If we allow the free market to play itself out, those that played risky hands will get that hand slapped and lessons will be learned.

Yes, these are crazy times and certain measures may be necessary to fix this problem we find ourselves in, but I get a real sense that there is a subtle, yet intentional message that is being sent to the general public in this crises that is saying "free market capitalism is flawed and the government is the only hope". If this is the case, we should all be scared, but maybe at least we get a new cool salute.

For additional thoughts:

1. Read "Atlas Shrugged" by Ayn Rand

2. See thoughts from Hugo Chavez articulating why he thinks America needs a new constitution....great, let's listen to him.

3. Great article articulating some of these thoughts

4. This one talks about the Socialism of America via the bailout....short and good

Revolt of the Nihilists

David Brooks today: http://www.nytimes.com/2008/09/30/opinion/30brooks.html?th&emc=th

The No Votes

This is a very cool graphic - the only category with more "Yes" votes were "Strong Democratic"

http://www.nytimes.com/interactive/2008/09/29/business/20080929-CONGRESS-VOTE-GRAPHIC.html

Gingrich: "final collapse"

http://thehill.com/leading-the-news/gingrich-final-collapse-of-the-bush-administration-2008-09-29.html

A Prolific Reader

Seen moments ago on Lou Dobbs Tonight:

Barack Obama on the Bailout: "If I am President, I will review the entire plan on the day I take office to make sure it is working to save our economy and that you get your money back."

Back on September 22, 2008, Senator Obama renewed a pledge to, once elected, "go through the entire federal budget, page by page, line by line" and "eliminate the programs that don't work and aren't needed."

Unfortunately, he didn't pledge to review either document PRIOR to the election. We have to elect him first, then he'll read them and let us know what he thinks. Until then, we just have to trust him.

I was thinking, since he has some time before his inauguration, perhaps he should get going on a Book It application - I mean, if he's going to do so much reading, he might as well get a free Pizza Hut pizza out of it...

Who's word do we Trust?

How do we react to things like this? What can we believe is truth?

What Went Wrong?

Interestingly, according to attendees, Obama was thoughtful, McCain said nothing.

http://abcnews.go.com/print?id=5895827

Morning Reading 09.26.08 - Bailout, Shmailout

Brooks - reviving the "Text or Context" conversation - money quote - "...what disappoints me about the McCain campaign is it has no central argument. I had hoped that he would create a grand narrative explaining how the United States is fundamentally unprepared for the 21st century and how McCain’s worldview is different."

http://www.nytimes.com/2008/09/26/opinion/26brooks.html?th&emc=th

Peggy Noonan piles on:

http://online.wsj.com/article/SB122237691191376341.html

Going green is never easy - (YOJ, notice the rec on shower length):

http://online.wsj.com/article/SB122238422541876879.html?mod=todays_us_weekend_journal

Best movie reviewer out there - every Friday - Joe Morgenstern:

http://online.wsj.com/article/SB122238344981876805.html

Another sign of the Apocalypse - McGangsta:

http://ap.google.com/article/ALeqM5hnRDS41TT3Iy0z4ISL2-0fOVA8pQD93DOTSG2

This just sounds like a really bad idea:

http://www.nytimes.com/2008/09/26/us/politics/26preach.html?_r=1&th&emc=th&oref=slogin

And in response, I post the wise words of John Yates II, rector of The Falls Church written to his Virginia congregation Sept 14:

"There is a movement afoot to recruit pastors next Sunday to 'preach politics.' The Alliance Defense Fund wants to challenge an amendment to the Internal Revenue Code, dating back to 1954, which says non-profit, tax-exempt entities (including churches) may not 'participate in, or intervene in ... any political campaign behalf of any political candidate.' It is hoped that, in their sermons next week, pastors will not only evaluate the current political situation and what sorts of candidates are desirable according to Scripture, but will also deal with specific elections and candidates, with specific recommendations about whom to support. That would, of course, violate the law.

"Over the years our policy here has been never to analyze individual candidates or to speak directly about political issues from the pulpit or in any other public forum. Candidates have visited us and attended worship, but we have refrained from singling them out in any way. I've always felt that our membership is extraordinarily well-informed on political matters and needs little encouragement from me to participate fully in the electoral process.

"But this law has always troubled me. I'm skeptical about the government's authority to dictate to the church in this way. There is a cultural elitism in America that would like to keep religion privately comforting but publicly irrelevant! But if our biblical faith does not inform and shape our thinking on public policy and guide us in whom to vote for, we are simply failing in our responsibility as followers of Christ. We won't always agree with one another, but it is unthinkable that followers of Christ wouldn't evaluate candidates policies in light of the Word of God. I don't plan to break the law next Sunday. But I could envision a time arising when I would feel that I would be disobeying God not to speak to you about some political issue or election."

Richard Epstein on the bailouts:

"The moral of this story is that bad regulation metastasizes. Short term heroics are no substitute for dispassionate deregulation, which won’t happen so long as our political leaders are fixated on greed. Taking steps to prevent financial meltdowns is more likely to hasten their unwelcome arrival, so says the libertarian."

Read it all on Forbes.com.

I promise one day, I'll post thoughts on something other than the bailouts. One day...

Morning Reading 09.25.08

Mike Allen - money quote - SCOOP 1 -- FORBES.com’s Brian Wingfield and Josh Zumbrun , on how Treasury got the $700 billion: “It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

I don't know about you, but now I feel much better - http://www.politico.com/playbook/

Well, maybe I actually do feel better. We could make money on this thing:

http://online.wsj.com/article/SB122230704116773989.html

Bush and Candidates to Meet on Bailout:

http://www.nytimes.com/2008/09/25/business/economy/25bush.html?hp

From CHANGE to CONVENTIONAL:

http://www.politico.com/news/stories/0908/13892.html

http://www.nytimes.com/2008/09/25/us/politics/25assess.html?_r=1&th&emc=th&oref=slogin

Cue Obama - "I thank the Clintons for their support...wait...what support?":

http://blogs.abcnews.com/politicalradar/2008/09/bill-clinton-do.html

Ham, Shem and Japheth take a walk down memory lane...yes, this really exists:

http://www.pbase.com/paulthedane/noahs_ark

Politico.com Playback:

New Deal: Prolonged (?) the Great Depression

Liveblogging from the dentist's chair....

Jonah Goldberg cautions that the New Deal is what made the Great Depression 'Great'...

Buffet to invest $5B in Goldman Sachs

The kind of bailout the markets really need. Free market capitalism. Thanks Warren!

http://www.nytimes.com/2008/09/24/business/24goldman.html?_r=2&hp&oref=slogin&oref=slogin

Sidenote: Albeit that some of his confidence is coming from the fact that the bailout is in motion....

Newt on Bailout: Unrepublican and a bad idea

The ever-astute Newt is saying the bailout is only going to make things worse.

In an interview with NPR, he says, "I think you have a Goldman Sachs chief of staff to the president and the Goldman Sachs secretary of the Treasury. And they convinced the president that the American people ought to send $700 billion to Wall Street, which I think is a very, very bad idea...."

Let's not forget that someone is paying for this thing. See full details here...

http://primebuzz.kcstar.com/?q=node/14552

Simplistic Bailouts

Ilya Somin at the Volokh Conspiracy has posted what equates to my simplistic gut reaction to the $700 billion bailout plan.

Obviously this is more significant than a restaurant failure, i.e. it's our entire financial system, but I certainly look forward to seeing some thoughtful responses to his argument.