Picked this up from Rational Capitalist.
It is incredibly shocking that the agency charged with oversight of the Federal Reserve has no clue how it's spending the one trillion dollars it just added to its balance sheet. On the other hand, there's a bit of Pot v. Kettle about Congress chiding the Fed for spending money with reckless abandon. They wrote the president a blank check with the TARP funds, and have abdicated any responsibility for how that money is being spent. Who is going to investigate them for that, and when?
Tuesday, May 12, 2009
"Mea Culpa, Mea Culpa"
The Wall Street Journal reports that, in an interview with Charlie Rose, Treasury Secretary Timothy Geithner has acknowledged the responsibility of the Federal Reserve for the economic crisis.
Geithner goes on to try to push responsibility back onto bankers for taking undue risks, but bankers were acting on the signals put out by the government. The government was holding interest rates low, encouraging (and even coercing) banks to make risky housing loans, and guaranteeing mortgage investments, all of which served to inflate the price of new housing on what looked like a perpetually increasing curve. What were the risks that the banks should have seen? That statism doesn't work? That government-created bubbles always end in government-created busts? If that is the risk that Wall Street should have recognized, then let Washington recognize it now and get their hands off the economy.
Mr. Geithner: "But I would say there were three types of broad errors of policy
and policy both here and around the world. One was that monetary policy around
the world was too loose too long. And that created this just huge boom in asset
prices, money chasing risk. People trying to get a higher return. That was just
overwhelmingly powerful."
Geithner goes on to try to push responsibility back onto bankers for taking undue risks, but bankers were acting on the signals put out by the government. The government was holding interest rates low, encouraging (and even coercing) banks to make risky housing loans, and guaranteeing mortgage investments, all of which served to inflate the price of new housing on what looked like a perpetually increasing curve. What were the risks that the banks should have seen? That statism doesn't work? That government-created bubbles always end in government-created busts? If that is the risk that Wall Street should have recognized, then let Washington recognize it now and get their hands off the economy.
Monday, May 11, 2009
The Divine Right of Kings vs Vox Populi, Vox Dei
Diane Hsieh at Noodle Food links to this news report regarding a woman who called 911 when her father began having a seizure and ended up in a pissing contest with the policeman handling the call over her use of the 'f' word.
The policeman is obviously a jerk. He priggishly scolded the woman for her initial expletive, even though it was not addressed to him and she had no way of knowing that he would be able to hear it. On the other hand, the woman continued using the expletive even though it was very obviously getting her nowhere with the guy, and meanwhile her father is in a seizure on the floor.
These people strike me as two petty tyrants trying to force their will on each other. The cop, in his position as a public official with the power of life and death over the people who come to him for assistance, has dug in his heels and is going to insist on protocol being followed, regardless of the consequences to the people he is supposed to serve. The woman, as a member of The Public, is insisting on her right to be served patiently and calmly by a public official regardless of how she talks to him, and she is apparently willing to let her father lie on the floor dying while she fights for her right to use the 'f' word.
It's "I'm the government, you have to do what I say" vs "I'm the public, you f-ing owe me."
It's also a symptom of the mixed economy. The entitlements of the welfare state empower government bureaucrats, while privileging certain sections of the population. It's inevitable that the two groups will come into conflict, and this is just one example of something that I'm sure happens every day.
As we move further into the realm of socialism, though, it's the government that will win this contest. When the takeover of the private realm is complete, the priveleged class will find itself enfettered. They will find that "shared sacrifice" includes them too, and whatever scraps they get from the government will come at the expense of being told when to stand, when to sit, and when to shut the hell up.
The policeman is obviously a jerk. He priggishly scolded the woman for her initial expletive, even though it was not addressed to him and she had no way of knowing that he would be able to hear it. On the other hand, the woman continued using the expletive even though it was very obviously getting her nowhere with the guy, and meanwhile her father is in a seizure on the floor.
These people strike me as two petty tyrants trying to force their will on each other. The cop, in his position as a public official with the power of life and death over the people who come to him for assistance, has dug in his heels and is going to insist on protocol being followed, regardless of the consequences to the people he is supposed to serve. The woman, as a member of The Public, is insisting on her right to be served patiently and calmly by a public official regardless of how she talks to him, and she is apparently willing to let her father lie on the floor dying while she fights for her right to use the 'f' word.
It's "I'm the government, you have to do what I say" vs "I'm the public, you f-ing owe me."
It's also a symptom of the mixed economy. The entitlements of the welfare state empower government bureaucrats, while privileging certain sections of the population. It's inevitable that the two groups will come into conflict, and this is just one example of something that I'm sure happens every day.
As we move further into the realm of socialism, though, it's the government that will win this contest. When the takeover of the private realm is complete, the priveleged class will find itself enfettered. They will find that "shared sacrifice" includes them too, and whatever scraps they get from the government will come at the expense of being told when to stand, when to sit, and when to shut the hell up.
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