Republican Hand Wringing

I am delighted by how the authoritarian element of the electorate got so thoroughly trounced in this last election.  Until Republican's can learn to answer in the manner of Joe Biden in the Vice Presidential debate, that while holding strong religious beliefs that they are not willing to impose them on others, the GOP is doomed.  There may be hope of a turn on this point by the Evangelical Right's recognition that they failed, but not for lack of effort.

“Millions of American evangelicals are absolutely shocked by not just the presidential election, but by the entire avalanche of results that came in,” R. Albert Mohler Jr., president of the Southern Baptist Theological Seminary, in Louisville, Ky., said in an interview. “It’s not that our message — we think abortion is wrong, we think same-sex marriage is wrong — didn’t get out. It did get out.

“It’s that the entire moral landscape has changed,” he said. “An increasingly secularized America understands our positions, and has rejected them.”

Christian Right Failed to Sway Voters on the issues

I disagree with the Reverend Mohler that it is the moral landscape that has changed.  I believe it is our core value separating Church and State that is rejecting religious positions that have no business being a part of government.  If this is the land whose first proclamation of independence includes the pursuit of happiness as a right, then how can we tolerate a religious movement that dictates what that happiness should be?  People voluntarily congregating into a community church is a expression of the pursuit of happiness for some and if it is a community of gay and lesbians, whose business is it but their own?

Gary Johnson for President

It's not a wasted vote.  A vote for Obama is a vote for more Government and Romney is a vote for less liberty.  I don't think either of the two major parties are ever gong to get it right until more of us stop wasting our votes on the lesser of two evils.

January 13, 2011 Extraordinary Financial Assistance Provided to Citigroup, Inc.

Thank you Gretchen Morgenson for finding this gem of a report from SIG TARP on her
"Citi’s Torch Has Passed. Now Find a Knife." editorial. It is apparent that some in Government understand NTBTF well.  I believe that Tim Geithner did his boss a dis-service by saving Citi from dismemberment and or bankruptcy and thereby not making it the example to have deflected the Tea Party and the 99 percent protestors.  The low rates that the FED has implemented has given Citibank the breathing room to rebuild its book at the expense of saver's in society and are part of the economic malaise that could cost Obama his re-election.

The gist of the report is in its opening written below.

Unless and until institutions like Citigroup can be left to suffer the full consequences of their own folly, the prospect of more bailouts will potentially fuel more bad behavior with potentially disastrous results. Notwithstanding the passage of the Dodd-Frank Act, which does give FDIC new resolution authority for financial companies deemed systemically significant, the market still gives the largest financial institutions an advantage over their smaller counterparts by enabling them to raise funds more cheaply, and enjoy enhanced credit ratings based on the assumption that the Government remains as a backstop. And because of the prospect of another Government bailout, executives at such institutions might be motivated to take greater risks than they otherwise would. 

The Dodd-Frank Act was intended in part to address the problem of institutions that are “too big to fail.” Whether it will successfully address the moral hazard effects of TARP remains to be seen, and there is much important work left to be done. As Secretary Geithner told SIG TARP, while the Dodd-Frank Act gives the Government “better tools,” and reduced the risk of failures, “[i]n the future we may have to do exceptional things again” if the shock to the financial system is sufficiently large. Secretary Geithner’s candor about the prospect of having to “do exceptional things again” in such an unknowable future crisis is commendable. At the same time, it underscores a TARP legacy, the moral hazard associated with the continued existence of institutions that remain “too big to fail.” It also serves as a reminder that the ultimate cost of bailing out Citigroup and the other “too big to fail” institutions will remain unknown until the next financial crisis occurs. 

The full report is available at the pdf link Extraordinary Fiancial Assistance

I prefer a one handed Economist

I believe it was Harry Truman who mentioned he preferred one handed economist versus the "on the one hand and on the other hand" version which he found useless.  Today's DealBook in the New York Times "Weighing the Dodd-Frank Restrictions Against the Power of Big Banks" by Steven Davidoff is an opinion piece that Harry would have despised because it had no opinion.

On the other hand St. Louis Federal Reserve President James Bullard is very clear.

Fed's Bullard-Banks should be smaller to manage failure

The most startling part of it was how big Goldman Sachs' asset base was.  I can't believe they would allow so much deadwood in their portfolio.  The old time partners are turning over and squirming in their graves.

The Command Perspective

Republicans profess a great belief in free enterprise, a chaotic economic competition described by Adam Smith's as individual's working in their self interest creating a general prosperity through an invisible hand; yet appear incapable of understanding the implication that such a system requires many undirected players. On the other hand being of the managerial class they have an aversion to undirected individuals. Quick to decry the nanny state yet eager to be the nanny the GOP needs a redirect back to the Wealth of Nations if they are not to wither into oblivion.

Joe Biden's response last week in the Vice Presidential debate that in spite of deeply held Catholic belief he was not inclined to impose his will on women in particular and those of other faiths in general. Paul Ryan on the other hand came across as beyond reproach and willing to do the Ayatollah's bidding. Ouch! So many instances in history of economic freedom masking an inquisition. It doesn't take much to further assume that Ryan is against gay marriage, which is difficult to square with the pursuit of life, liberty and the pursuit of happiness. And while we are in the mood of telling people what to do; how about increasing our military budget so that we get to tell other countries what to do?

Until the GOP can shuck aside the command perspective and let the Church provide moral persuasion and Government a free economic environment the party is doomed. Let's take Dodd Frank for example. Democrats concoct a heavily regulated nightmare of a piece of legislation and what is the Romney response? Yes we need regulation, but Dodd Frank needs some tweaking. Really? Is that all? The simplest and cleanest solution is the NTBTF title of this blog. Make every banking institution small enough so that no one but it's stockholders cares whether it fails or not. If it is government insured then it is regulated and managed by the FDIC. If it's not, then expect greater compensation to cover risk from a non bank and un-insured investment. This solution strikes me as rather more similar to the broad make up of the Constitution than the micro managing legislation determining the gallonage of a toilet flush. Is Romney enough of a TR to bust up the current bank trusts? I don't see it not nor do I think that Republicans think in terms that if Democrats are the party of the minutiae that they should be the counter to it.

Tweedledee versus tweedledum

After listening to Simon Johnson on NPR today I have to conclude sadly that there is no Teddy Roosevelt trust buster in Romney to counter Obama's  betrayal of his mandate by sucking up to the Too Big To Fail Banks.

Catalonia secede from Spain?

My name is Catalan and so is a part of my heritage and yet I find Ricard Gonzalez and Jaume Clotet's "Spanish Prisoner" editorial in the New York Times as pathetic, childish and trivial.  Why don't they examine Switzerland, the Helvetic Confederation, as a system of retaining their culture as well as nationality and stop wasting time dreaming of a solution that solves nothing.