The Power of Disability
I spent the last eight days or so sick with the flu bug from Hell. I had a slightly better Good Friday than my savior; didn’t do as well on Easter. On the bright side of life, I did manage to lose 8 pounds without a single visit to the dreaded squat rack. But the whole thing had me asking some very fundamental questions… Why | Read More »
Roosevelt (T) and Jackson are History’s Guide To Solving “Too Big To Fail”
We can statistically quantify “Too Big To Fail” in a number of different ways. George Will of the Washington Post is man familiar with the uses (and perhaps the nefarious uses) of quantitative data. He tells us 5 banks hold assets equal to 60% of the GDP. The top 10 banks hold 61% of all commercial banking assets; they only had 26% 20 years ago.
Will’s basically Conservative bent leads him to not be fond of the Dodd-Frank Act inflicted upon American Industry by the current Obama Regime. I certainly agree and sympathize with this point of view. However, not liking Dodd-Frank is one thing, getting rid of it and the systematic problems that made its overreach tenable is a taller order than merely quantified complaining. To actually dismantle the TBTF Empire and the implicit guarantee it enjoys via Dodd-Frank, it may help us to indulge in some Presidential History involving too great men. President Andrew Jackson foresaw and attempted to prevent this problem. President Theodore Roosevelt solved TBTF in some industries other than banking.
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Do we feel lucky?
The Monday following Japan’s deadly earthquake, tsunami, and unfolding nuclear nightmare, we bought fish for our first family aquarium. Jennifer and the girls and I pored over the beautiful swimmers at a pet store in Seaside, Oregon, evacuated three days prior. An employee’s helpful advice about keeping a healthy tank were a welcome counter-balance to the grief and worry hanging over us. The catastrophe in | Read More »
y latest contribution to The Arena can be found here.
Moral Hazard Rears Her Ugly Head
So now, the bailout target of choice appears to be Big Auto. An industry that has largely failed to adapt to modern times is beseeching Washington for funds with which to stay afloat. I vote no. Everything that those concerned about moral hazard have warned about is coming to pass; businesses are viewing the government as the stopgap of last resort and passing off their | Read More »
As I take time from actually accomplishing work to think about the situation I can’t escape the feeling that this is a mistake. I’ve tried to shake it, I’ve tried for weeks. I thought fear would do it, and it came close. I thought research and gaining a better understanding of the problem would do it, and it almost did. However, try as I might, | Read More »
This is a responsibility crisis, not a financial one
Today, several high-ranking members of Bush administration before U.S. Senate’s Committee on Banking about the “turmoil in US credit markets”. Main issue was the $700 bi bailout package, a.k.a. Mother of All Bailouts. This massive, unconstitutional bailout creates a bigger problem for generations ahead. And I’m not talking about the huge increase in the national debt.
A Lesson on “Moral Hazard” – How Companies Are Taking Advantage
Remember what set off the current Wall Street crisis? The first huge company to go belly-up was Countrywide. Who bought them? Bank of America. Now, Merrill Lynch has gone to… Bank of America. Are we really supposed to think that BofA just loves the risk of bad entries on its books or that its mission statement is to be benevolent to other companies in crisis? | Read More »