Today's economic ranting
2008-09-25 23:43:00.676521+02 by Dan Lyke 0 comments
Asia Times: E pluribus hokum or When the gamblers bail out the casino:
Paulson's dreadful scheme will become law, because Americans love their bankers. The bankers enable their collective gambling habit. Think of America as a town with one casino, in which the only economic activity is gambling. Most people lose, but the casino keeps lending them more money to play. Eventually, of course, the casino must go bankrupt. At this point, the townspeople people vote to tax themselves in order to bail out the casino. Collectively, the gamblers cannot help but lose; individually they nonetheless hope to win their way out of the hole.
Vanity Fair uses Paulson's words to explain the current situation, like this choice quote from June:
“In an optimal system, market discipline effectively constrains risk because the regulatory structure is strong enough that a financial institution can fail without threatening the overall system. For market discipline to constrain risk effectively, financial institutions must be allowed to fail.”
The latest John McCain campaign ploy in Shel Silverstein style:
"I cannot go to Senate today",
said grumpy old man John McCain.
"My pressure's up, my penis is down,
My first wife lost her pageant crown.
(Via Bitter Girl) There's a push to get together to watch the debate tomorrow, assuming McCain shows up, but I think if I have to hear the POW story as a non-sequiter "answer" fifteen more times someone's gonna get hurt. The good news is, however, given McCain's intimate knowledge of the S&L scandal he's got experience in dealing with financial disasters.