Throwing good money after bad

You thought the bank bailouts and TARP were over? They aren't over....

From the WSJ via Hotair -- Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.

The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.

Democrats can't, but even the stupidest econ 101 student can tell you that when you subsidize failure, you get more failure. Rewarding reckless, failed bankers with free money tells these guys that they can keep engaging in the bad banking practices as before, without penalty....just as rewarding guys like Barney Frank, the criminally derelict author of the banking/housing collapse, with re-election tells him that he can repeat his awful decisions without penalty.

I swear, if we taxpayers have to fund another round of bank bailouts, only to watch the corrupt executives reward themselves with enormous bonuses of our money, I'll go ahead and declare this country officially done.

From the ridiculous, to the absurd...thanks GWB

With the economy in shambles, portfolios diminished, jobs losses on the rise, etc., Americans are being asked, check that--forced, to do with less and change our spending habits to weather the bad times. If we are expected to spend less because we have less to spend, why aren't the state and federal governments expected to do the same?

After bailing out Wall Street and the U.S. auto industry amid warnings of a deep recession, Uncle Sam now is being asked to chip in $1 trillion over two years for states facing severe budget shortfalls.

In what Constitution does it say that big-spending states have claim to my tax dollars in order to finance the stupid things that got them in bad shape to begin with? If my family must make do with less, why sholdn't the government curtail it's spending too? Heaven forbid politicians should do without vote-buying cash.

Once again, we are witness to the hastening demise of freedom and responsibility as an unfortunate, unintended consequence of Bush's lurch toward socialist, wealth-redistribution policies. Once the democrat governors line up for their slab of other peoples' money, the republican governors will jump in too. Where does this bailout idiocy end? Is nobody responsible for their own stupid decisions anymore?

The Crap Sandwich becomes a double-decker

Last night in the debate, John McCain uttered these startling words that might have cost him the election, that is if he ever had a chance....

WASHINGTON (AP) - Republican presidential candidate John McCain is proposing a $300 billion program for the federal government to buy up bad home mortgages and allow homeowners to keep their houses.

McCain said: "Until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy and we've got to get some trust and confidence back to America."

In an unusual step, McCain announced the plan during Tuesday's debate. He said that as president he would direct the federal government to purchase mortgages directly from homeowners and mortgage providers. The loans would be replaced with fixed-rate mortgages, ostensibly at a loss to the government.

So let me understand this, any dumb American who foolishly bought a home he couldn't afford, gets his mortgage refinanced and his home devalued to an amount for which he can afford to pay? What about the home values in the neighborhood? If some idiot buys a house for $300K and the government decides that he can only afford a $100K home, does he get to keep that home and only pay $100K for it? That completely undermines the whole system of home valuation. Those of us who are continuing to pay our full mortgage lose big time because our homes are now worth less.

Seriously, by promising to further nationalize the mortgage industry, I think McCain may have just thrown the election. By desperately attempting to out-populist Obama on this issue, he makes the election now about who can deliver the biggest give-aways to undeserving degenerates who got into mortgage trouble through their own ignorance and gullibility. If this is really what McCain intends to do, he may have lost my vote. Maybe I'll just write in Hank Rearden in protest on my ballot.

Tax Freedom Day

I missed the observation yesterday but April 23 was Tax Freedom Day. If the government calculated all the taxes that you owed and forced you to pay it all up front, it would take until April 23(yesterday) before you were actually working for yourself. That's for the average American worker. Some people pay more and millions pay far less but the average is April 23. If we had a flat tax of about 17%, Tax Freedom Day would be around March 2.

This awful progressive income tax structure under which we toil stifles creativity, punishes achievement, and rewards shiftlessness. Just awful!

subsidizing poverty or promoting success?

I'm kind of conflicted about this program. What do you think?

NEW YORK (AP) - Poor residents will be rewarded for good behavior - like $300 for doing well on school tests, $150 for holding a job and $200 for visiting the doctor - under an experimental anti-poverty program that city officials detailed Monday.

Mayor Michael Bloomberg traveled to Mexico this spring to study the healthy lifestyle payments, also known as conditional cash transfers.

The theory behind cash rewards is that poor people are trapped in a cycle of repeated setbacks that keep them from climbing out of poverty.

First let me say that I think there is way too much abuse potential where cash give-aways are involved. That being said, if there are appropriate verifiers, it might have a chance of doing some good.

That it's private money is a good thing. If private citizens want to give money to hare-brained schemes that's their business.
That Bloomberg used Mexico as a model is disturbing. Why would you use a destitute third-world country's failure as a model to reduce poverty in the richest country in he world? And if Mexico's program is so successful, why are they all coming to America?

It is axiomatic that you subsidize those things you want more of, and punish those things you want less of. Example: we want less crime, so we punish criminals...this is unless they are Hispanic criminals, then we shower them with taxpayer funded fabulous cash and prizes. Shouldn't we be punishing poverty rather than rewarding it? Isn't economic success it's own reward? The vast welfare programs of the 70's taught us that paying people to be poor just perpetuates their poverty. I think that poverty should be painful and difficult, not made less so by taxpayer giveaways.

Then there was this part of the article...[emphasis mine]

But some critics have raised questions about cash reward programs, saying they promote the misguided idea that poor people could be successful if they just made better choices.

"It just reinforces the impression that if everybody would just work hard enough and change their personal behavior we could solve poverty in this country," said Margy Waller, co-founder of Inclusion, a research and policy group in Washington.

What an asinine statement! Personal behavior and choices are precisely the cause of poverty. But for mental retardation, there are exactly three choices you can make in America to avoid poverty:
1: finish high school
2: stay off drugs
3: keep your legs together if you're a girl and don't get anybody pregnant if you're a boy, until you are married. It goes without saying that you must get and keep a job. Even if it starts at minimum wage, if you work hard and prove your value to your boss, you won't be making minimum wage for more than 6 months..you'll be getting raises or changing jobs for a higher paying one.

Successfully deciding to do those three simple things will, 99% of the time, guarantee you to not be in poverty.

I disagree in principle with paying people to do what they should be doing anyway. But if it can be shown in like 5 years that people who got paid stayed out of poverty, then I'll change my tune. I'll still disagree in principle but I'll acknowledge that it works.

Water Works ?

The BWWSB has once again proven that their lack of planning has helped exacerbate a problem condition. The last "drought" we had in the Jeffco metro area was a few years back. At that time these civic leaders should have gone in to the water supply lakes and dug out and deepened them. Then as the waters were filling up, our storage pools would have had a larger capacity and thusly would have helped lessen or avoid the current water situation that the metro area is facing. Since hindsight is always 20/20, I hope that the same BWWSB leadership team will review the current situation and put some funds into helping eliminate this as an issue. With an ever growing population, increasing usage of sprinkler systems, and in general a greater demand for water, it seems apparent that without some protection and some foresight, we can expect the current status to be repeated. Dredging and digging can probably be accomplished very cheaply. The BWWSB has a number of its former contractors serving time right now for bid rigging, etc., lets just put them to work on the county problems while they repay their debt to society. If not, I'll bet that a number of the bigger general contractors in the area would pitch in and loan equipment and personnel to do the needed digging. We also get some dirt to help erosion issues somewhere for free. I want to take showers. I want to wash dishes and flush toilets. I want to do this without waste, but I don't think that this city is ready for 1-2 flushes a day per household. Thought for the day in Waterworld: If its Yellow, let it Mellow; If its Brown,flush it Down - at least for now. Lets move to solve water storage issues for the future.

David vs Goliath

As a proud American, I'm always reluctant to take someone else's side against my own country, however, in this case, I'm siding with Antigua. It's kind of a complicated case but I'll try to simplify it here. (If you want to read the whole article go here.)

The tiny island country of Antigua (pop 70,000) has found itself in the crosshairs of the Bush administration's war on immorality. The U.S. has practically shut down their offshore casino operations by banning their ability to process U.S. credit cards. Antigua complained to the World Trade Organization and threatened to stop recognizing our intellectual property rights which the WTO demands all countries do for each other. Their complaint is a good one: Why should we respect thier IP rights when they don't respect our legal right to operate businesses? The U.S. is imparting our absurd anti-gambling morality on them, while expecting them to dutifully observe our IP wishes.

Well guess what? We have way more to lose than they do. What happens when they decide to start copying our music, movies, and software and distributing it worldwide? Our entertainment industry would tank, not that it would be that tragic given the drivel that passes as entertainment these days, but that's not the point.

The point is that we are meddling in the affairs of a sovereign country on the grounds that we want our voters to think we disapprove of gambling. We deserve whatever retaliatory measure Antigua decides upon.

If the Bush administration measured it's policies by the Constitution, they would never get in the trouble they always end up in.

Oprah's school for girls...in Africa

A lot of conservatives are criticizing Oprah for this...

Billionaire talk show host Oprah Winfrey opened her new school for poor girls this week in South Africa. Winfrey hopes the Oprah Winfrey Leadership Academy will empower the young students to be the country's leaders of tomorrow.

People are asking, "Why doesn't she build a girl's school here in America where we have poor people too?" I don't have a problem with her building a school in Africa. Nobody can argue that there is much need in Africa for girls to be afforded opportunities to improve their lives, and America's poor are among the most priviledged poor in the world. Our poor live better than most middle class families in other countries. There are opportunities here in America for anybody who is motivated enough to reach out and grab them. But the biggest reason for Oprah to have built a girl's school in South Africa is because it's her money and she can spend it where she wants. We conservatives don't like for liberals to guilt us into spending our money on kooky environmental things, or programs to give aid to the undeserving, or some other liberal pet programs, and we shouldn't tell Oprah where she should spend her money. She's an ingorant, kooky liberal but she has the right to spend her money in any way she wishes.

A deal is a deal

If you're one of the three people who're currently watching the CBS Evening Fluff featuring perky news-reader Katie Couric every night, you'll probably be familiar with the story she ran last night. She incredulously wondered why the CEO of TheHomeDepot, Bob Nardelli, was fired, but with a golden parachute worth 210million dollars. She cited the contradiction between the golden parachute package and his lack of results as CEO.

Hey Katie, take a look in the mirror sister. CBS News viewership has dropped below what it was with the hapless Bob Sheiffer who you replaced. Nobody watches your show, yet you command a 15 million per year salary? How does that make sense? According to you, the results you produce in your job should be directly reflected in your compensation, whether it's good or bad. Based on your production in terms of ratings, you should be making like 100K a year.

I guess legally negotiated employment contracts are appropriate only for liberal, news readers and not for eeevil, capitalist CEO's.

Vice vs Virtue in the market place

If you're looking to make a lot of money with your investments this year, apparently it would be wise to invest in companies which deal in alcohol, tobacco, gambling, and porn. There are a couple of mutual funds which have only companies dealing in these vices. The ViceFund is one of those funds and it returned 23% last year.

By contrast, the Ave Maria Catholic Values Fund, which excludes companies that violate Catholic doctrine, is up only 13 per cent.

Sometimes good guys do finish last.

A big fat money grab!!!

There is a movement afoot by the American Medical Assoc. to tax soda beverages. Ostensibly it's designed to combat obesity in America. I believe the doctors have the best intentions since they won't see any money from this, but don't be fooled for a second into thinking that the legislators promoting this "health tax", care one bit about your fat kid, or care that Americans are among the fattest people on Earth, or even care that a tax on sodas would actually decrease consumption...it definitely would if you believe the relationship between price and demand. This is nothing more than a money grab by legislators disguised as a tax "for the common good"...how I loathe that fake sentiment..."for the common good". Legislators always tell you that a tax is for your own good...right before they reach into your wallet.

The first question you have to ask when legislators wage a new tax is where will the money go. All you have to do is follow the money trail. The representatives in Congress are insatiable when it comes to seizing and spending your money. They can never get enough and will never repeal taxes once levied. They will use the money to finance votes for their own re-election because after all, incumbents are in the business of getting re-elected.

Just like with cigarettes, legislators don't want you to stop drinking soda any more than they want you to stop smoking...if you did, the tax revenues would dry up and they would have nothing with which to purchase re-election votes.

Here's a novel idea...let the people decide what is good for them. As obesity climbs up the list of causes of death and disease, insurance companies will raise rates on fat guys...they already do in a lot of cases. This market dynamic will compel fat guys to loose weight in order to save money, or they will pay lots more for insurance than the rest of us. Contrary to liberal thought, insurance companies are not in the business of insuring folks...they are in the business of making money. If actuarial tables tell them that fat guys cost them twice as much money as the non-fat, they should be allowed to charge fat guys however much in premiums it takes to cover their increased health-care costs.

"But Ed", you ask, "what if fat guys decide that their self-indulgent lifestyle is more important to them than saving insurance-premium money and they end up costing the regular citizen more money in health-care costs because they are prone to so many more diseases and health calamities, but have the same coverage as the rest of us? Shouldn't we do for them what they are unwilling to do for themselves (by taxing unhealthy consumption to pay for their additional drain on the system)...not necessarily in their best interest...but in the interest of lowering health costs for the rest of us?"

A well-constructed argument indeed...not bad for a casual blog reader.

Here's the thing however, the AMA (and legislators because they are the only ones who can raise revenue by taxation) intend to, in effect, tax obesity by punishing that which is supposed to cause it. It's the insurance companies who must bear the burdon of additional costs to treat the obese, so shouldn't they be the ones who collect the extra revenue from fat people in the form of higher premiums? The problem is that Congress cannot raise money for itself if insurance companies raise premiums for the obese, so it grabs a share of soda company revenue by claiming that it's taxing soda consumption for the public good.

The sad history in America of government regulation of individual behavior by taxation is long and distinguished...alcohol, tobacco, gasoline, sales, travel, food, you name it...if it can be consumed, it can and will be taxed.

You see, taxation to regulate individual behavior is liberal dogma. To the delight of the liberal, two birds are killed with a single tax stone: first and foremost is the money that comes to the legislator to spend "for the common good" as a result of the new tax; second, and more satisfying to the liberal, is the effect of pressuring people to live their lives as he sees fit. To liberals, they are enlightened and superior in every way to regular Americans, and only they know what is best for us. We are generally incapable of making the "correct" purchasing and consumption decisions for ourselves. This point (Americans forcing other Americans to live their lives a certain way by punishing behavior) is the crux of what is wrong with taxing soda, or fast food, or twinkies, or whatever otherwise legal behavior liberals decide is bad for us. The only exception to that is in the case of indigent individuals who clamor for taxpayers' money in the form of public assistance...but that's for another blogpost.

Americans are already, by far, the most generous people in Earth. We don't mind paying extra to help those that are truly needy, or are sick, or injured, or otherwise incapacitated through no fault of their own. What is wrong is forcing American taxpayers to subsidize bad individual decision making and behavior by punishing what is perfectly legal behavior for everbody else.

If you want to get fast-food, sweets, and sodas out of the schools, fine with me. If you want to get celebrities to do PSA's endorsing healthy eating and exercise lifestyles, fine with me. What is not fine with me is punishing legal product consumption through taxation under the guise of the public good. If I want a Coke, I should be able to purchase one at a price decided upon by the manufacturer, not the government. If a fat guy wants to drink Cokes, even though they're making him fat, that's between him and his insurance carrier. I shouldn't have to pay for his lack of self control, and he should have to pay the costs of his obesity to his insurance company, not the federal government.

Blogger's footnote:
I'll bet Ted Kennedy is the first one to vote in favor of the soda tax when it's introduced. You'd think that a guy whose belt size is like 64 would be embarassed to presume to tell other Americans what' s good for their health.