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I found this article over at CNN.com to be helpful not only in explaining the roots of the current financial crisis, but also in offering a real solution. The article is written by Jefferry Miron, a Libertarian economist at Harvard University (an endangered species to say the least). The article can also be found here. Enjoy!
- Bishop Joe
Commentary: Bankruptcy, not bailout, is the right answer
By Jeffrey A. Miron
Special to CNN
Special to CNN
Editor’s note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.
CAMBRIDGE, Massachusetts (CNN) — Congress has balked at the Bush administration’s proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the “troubled assets” of financial institutions in an attempt to avoid economic meltdown.
This bailout was a terrible idea. Here’s why.
The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk. Read the rest of this entry »
Rep. Ron Paul (Republican of Texas) is a bit of a nut. There I said it. His ideas on anything that happens outside of our borders makes me want to show him a globe just to make sure he knows its round. But when you get him off of the evils of NAFTA and the illegality of US troops being anywhere without Congressional approval, he is a prophet of sensible, libertarian, domestic public policy. Now with that out of the way, I think we should all read his insightful words concerning the Bailout culture in Washington, Wall Street, Main Street, and every other street in-between. His editorial for CNN can be found here or reprinted below:
Commentary: Bailouts will lead to rough economic ride
By Ron Paul
Special to CNN
Special to CNN
Editor’s note: Ron Paul is a Republican congressman from Texas who ran for his party’s nomination for president this year. He is a doctor who specializes in obstetrics/gynecology and says he has delivered more than 4,000 babies. He served in Congress in the late 1970s and early 1980s and was elected again to Congress in 1996. Rep. Paul serves on the House Financial Services Committee.
(CNN) – Many Americans today are asking themselves how the economy got to be in such a bad spot.
For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.
Unfortunately, the government’s preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention. Read the rest of this entry »
Here are three articles (with various opinions) about the current Financial Market “Apocalypse.”
Now that you have a massive migraine and the sudden urge to assume the fetal position let me attempt to put the crisis in simple terms. Lets start with the ideal situation:
People need money. Banks have money. Money is cheap.
Banks lend money to people. People make more money. People pay back banks. Banks make more money.
While not all of the corporations that are sinking are banks, the same principle applies. They are all business that have something to do with assisting individuals to secure and grow wealth. Now lets look at the above situation with a few additions that I believe are the cause of the current crisis:
People need money because they are excessively taxed. Banks have money, but are forced by Congress to loan it to people who can not possibly pay it back or know that if their loans tank then there will be a US government bailout at the end of the road. Money is not as cheap because the Fed is treating interest rates like their personal yo-yo.
Banks lend money to people whether they should have it or not. People do not make enough money (for various reasons). People do not pay back banks. Banks do not make more money. Banks go broke and the US Government bails them out. People can not get loans for homes and new business, so wealth generation is slowed. A Republican is in the White House so capitalism is blamed. US Government regulation is now the “solution.”
If you ask me Option A is the better road. The problem here is not Wall Street greed, or a lack of regulation. The problem is a lack of risk and over taxation. If individuals and business were not taxed to the level they are now, then this convoluted loan industry would not be as large or as necessary. If there were more risk (i.e. no more bailouts) then companies and individuals would be more careful about how much they borrow and banks would be more careful about how much, and to who, whey lend. In order for capitalism to work companies must be able to fail, no matter their size or “importance” to the national or global market. Here is a couple of quick equations for you:
Necessity + Risk = Prosperity
Necessity – Financial Responsibility + Excessive Taxation + Class Envy + Regulation = Bankruptcy
Which would you pick? It doesn’t take an economist to figure it out.
Peace be with you,
Bishop Joe
My daughter turned two this past week. The levels at which my life has changed over these past two years are mind boggling. It has also been educational. I didn’t know that there was so much variety in diapers. I didn’t know that there were “levels” to baby food. I didn’t know how tempting it would be to set your kid in front of a TV just for a few minutes of silence. I also didn’t know there was a “potty training” sub-culture.
We have begun the preliminary stages of potty-training our daughter. I am astonished at the amount of doo-dads, books, websites, and yes, even support groups for those potty training. Its odd to think that potty training has become a community activity. In this overwhelming toilet culture I have a couple of observations both dealing with potty books.
The first observation is that many potty books are surprisingly graphic. One of my favorites (insert sarcasm here) is “Everybody Poops” by Taro Gomi. Here is an excerpt from an Amazon review:
“A hilarious book showing many kinds of animals, their poop, and describing where and how they poop (e.g. while walking). Also reviewed are the ways a baby poops in a diaper, small child in a potty, and older children and adults on a toilet. Hysterical graphics such as rear view of child sitting on toilet with the poop in midair, which we see between the gap in his buttock cheeks. Other scenes demonstrate how the toilet is flushed and the poop is washed down the pipes.”
One word comes to mind….”Ewww.” My wife and mother-in-law where potty book shopping the other day and came across a book titled “Once Upon a Potty – Girl.” My wife opened up to a random page where the little girl in the book was bent over showing the relevant anatomical part, exclaiming “This is where the poop comes out!” I am all about being accurate when we tell kids things about their bodies, but I can do it without visual aides. I can understand the need for children to be comfortable during their potty training time, and kids books can assist with that. However there is a point where it can get a little too graphic. Besides if the two year old who has this book read to them is anything like my two year old then be prepared for a bold proclamation of “This is where my poop come out!” next time you go to the store.
My second observation is that potty books are surprisingly complementarian. About 75% of the books I have seen are gender specific. Now this should seem like an obvious neccesity given the anatomical particulars of pottying amongst the genders. However in our increasingly gender neutral society I have come to expect even in toilet literature an attempt to minimize the difference between boys and girls. Of course my pessimism reminds me that in only few years there will most likely be a wave of neutered potty books….perhaps even a trans-gendered one. Talk about “ewwww”. Well at least for now we can rest assured that despite the genderless programing we are exposed to on a daily basis, we can always be comforted by one of the last complementarian strongholds, Potty Books.
Until next time remember Bishop Joe’s life lesson #238. Everybody poops.
Peace be with you,
Bishop Joe
Food (low cal) for thought…….
-Bishop Joe
No secret behind fat kids – McDonald’s
September 11, 2008 05:52pm
THE Australian head of fast-food chain McDonald’s says there’s no mystery surrounding childhood obesity: kids are fat because they don’t exercise as much as they used to.
Chief executive Peter Bush also says McDonald’s, according to the chain’s own research, provides just one in every 72 meals an average child eats.
“You’ve got to look at those other 71 meals kids consume that often come out of the cupboard at home,” Mr Bush told a federal parliamentary inquiry into obesity, sitting in Sydney today.
“Where we sit on this is that we probably look at it as a very perplexing and complicated issue.
“Certainly the studies have indicated that the issue is linked to a change on lifestyle – kids exercising less, watching more TV, kids playing video games.”
Mr Bush said academics where now properly studying the causes of obesity, but most pre-existing data blaming fast food was inconclusive.
“When the very first obesity summit was held in Sydney in October 2002, my predecessor sat through the two days of that session,” he said.
“Through that time, overwhelming evidence was presented, but not substantiated, that fast food was the culprit.
“What also emerged at that time was there were very few studies completed worldwide at that stage.”
Mr Bush said fear of crime was a factor in obesity, arguing parents do not allow children to walk to school anymore.
The House of Representatives standing committee inquiry, which began in May, is looking at the increasing prevalence of obesity and future implications for the health system.
University of Sydney Associate Professor Jenny O’Dea presented the findings of a study on obese children and a survey of 345,713 adults.
It showed poorly educated parents were more than twice as likely to have obese children as well-educated mums and dads.
The Roy Morgan survey also showed the rate of obesity for adults in the lowest socio-economic groups grew at almost triple the rate of those belonging to the highest earning and educated groups between April 2000 and March 2007.
Nearly a third of people in the lowest socio-economic group were regarded as obese in March last year, compared with 26.6 per cent in April 2000. In the highest socio-economic group, 17.8 per cent were obese, up from 15.9 in 2000.
Dr O’Dea said governments should rethink obesity campaigns, saying they must address social inequities rather than opting for “shame and blame” strategies, which did not work.
She also said the international standard for measuring obesity was generally fair, but the label should be treated with care as the body mass of some ethnic groups differed.
“You can’t assume that an overweight, obese child is carrying too much fat,” she said.
“There are kids who fit into that category. They are the the Samoan kids and the Fijian kids and the Greek boys who are very muscular and the Lebanese boys.”
Dr O’Dea studied 960 families of children, from years two to six, in 10 primary schools across regional and rural NSW.
She discovered 2.7 per cent of tertiary-educated mothers had obese children compared with six per cent of mums who had completed year 10 or less.
In the low-educated group 7 per cent of fathers had obese children, while the figure was 3 per cent for those in the highly educated group.
