Tag: Bailout

Cyprus Hell

As you may have heard, Cyprus is being bailed out by the EU and the terms are rather striking:

The euro zone agreed on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risk of a wider run on savings.

The eastern Mediterranean island becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to the euro zone for financial help during the region’s debt crisis.

In a radical departure from previous aid packages – and one that gave rise to incredulity and anger across the country – euro zone finance ministers forced Cyprus’ savers to pay up to 10 percent of their deposits to raise almost 6 billion euros.

Parliament was due to meet on Sunday to vote on the measure, and approval was far from assured.

This may sound familiar. This scenario — a seizure of savings and investments accounts — has been flogged for about two decades by various pundits who are convinced it will happen in this country. Does the Cyprus bailout indicate this is a possibility? I think it’s proof that it won’t happen, actually.

First, Cyprus is in a unique situation:

The depositor haircuts seem to have been necessary to get political support for the deal in the EU–and political support in the EU was necessary because Cypriot banks had assets somewhere in the neighborhood of 8 times the Gross Domestic Product of Cyprus. And just to bring it full circle, the banking system had grown to such grotesque, hypertrophied proportions because Cypriot bank accounts seem to be a favorite of tax-dodging Russian oligarchs . . . which is why it was politically necessary to give depositors such a large haircut.

This is not a situation even remotely comparable to the United States. For one thing, there would be no one to bail us out if the banking sector grew to $120 trillion. For another thing, there is no agency that can compel us to terms of a bailout. For a third, vast amount of the of assets in our banks are not held by shady foreign concerns (right now, the Cypriot government seems to be trying to allow natives to pull out cash while extending the bank holiday so that Russians can’t).

Second, even this relatively small taking (on the scale of the European economy) is triggering a potential disaster. There is a run on Cypriot banks as people try to get their money out. The Euro and European stocks plunged in morning trading. And it’s still touch and go as to whether the legislature will assent to the terms.

So, no, I don’t think this is a “it could happen here” scenario. In fact, at this point, I’m not 100% convinced it’s an “it could happen there” scenario. The reaction of the Cypriots and the markets is a perfect illustration of why this is such a bad idea. And hopefully this will be thrown at the next obscure Lefty twit who suggests the idea in a Congressional hearing and sparks the next round of claims that a savings tax is imminent.

Banking On AIG


The U.S. Treasury’s sale of its remaining stake in American International Group Inc (AIG.N) will leave taxpayers with a profit of nearly $23 billion – more than the next three most successful bailouts combined.

The government’s profit on the deal is a turnabout from what was one of the most reviled bailouts of the financial crisis.

The 2008 rescue later spurred a senator to suggest top executives at the insurer consider suicide. The Government Accountability Office at one point suggested there was a real chance taxpayers would never be repaid in full.

Yet they were, with $22.7 billion in total returns, including the proceeds of the sale Treasury launched Monday night, AIG said. The government provided AIG with some $182 billion of support.

Before we start dancing in the streets, let’s clarify a few things. We’re still about $38 billion in the hole on TARP, most of the outstanding sums being those lent to the automakers. A lot of the AIG money was actually money paid to European banks that had CDS’s with AIG. Moreover, some losses are not being counted here. How much tax revenue did the government lose because of a stinky economy created by the bailout culture? How much money did we all lose because of that? If the bailouts hurt our economy, on net, to the tune of one tenth of one percent, that would easily wipe out any “profit” from TARP. You might still argue it was necessary as the lesser of two depressions, but let’s not pretend TARP made us all rich.

Most importantly, the money was never the big problem. The big problem was and remains the moral hazard. A big signal has been sent to the big banks that the United State government will bail them out of trouble. Do you think that’s going to cause them to invest more conservatively? And the big banks used that money to consolidate the banking industry, with the Big Five gaining more market share by using the loaned money to buy banks rather than fix the mortgage market. I don’t think it’s all that remarkable that banks managed to turn a profit with monopoly money loaned to them without restriction by the government.

The big risk? This time we are only (so far) out $38 billion. Next time it may be far far worse. And every time someone celebrates TARP “turning a profit”, they should be reminded of the precipice we have put our economy on. If we do end up turning a profit on TARP, it will be because of luck, not because it was good policy.

The UAW Bailout

A new study concludes … surprise! … that the automotive bailout was mainly a bailout of … well, you know:

President Obama touts the bailout of General Motors and Chrysler as one of the signature successes of his administration. He argues that the estimated $23 billion the taxpayers lost was worth paying to avoid massive job losses. However, our research finds that the president could have both kept the auto makers running and avoided losing money.

The preferential treatment given to the United Auto Workers accounts for the American taxpayers’ entire losses from the bailout. Had the UAW received normal treatment in standard bankruptcy proceedings, the Treasury would have recouped its entire investment. Three irregularities in the bankruptcy case resulted in a windfall to the UAW.

We’ve talked about this in general terms, but they break it down into specifics. Basically, pools of creditors that were supposed to be treated equally were split into two pools — the unions and everyone else. The unions got far more than the “everyone else”. They also avoided pay cuts and benefits cuts, which might have happened in a normal bankruptcy, as we’ve seen with the airlines. The net result is that our $26 billion loss is about what the UAW got out of this.

(I can’t find the reference, but I believe the pension funds would have gotten federal money anyway had they collapsed. But that’s only a portion of the payout to UAW. And at least that would have been honest.)

People see this as an anti-labor thing, but it really isn’t. I’m not fond of unions but I support the rights of private sector unions to exist, to negotiate, to strike, to organize and to get their contracts honored (public sector unions are a different matter). I think the union focus is drawing people away from the salient point: President Obama gave $26 billion to his political allies. That’s bigger than everything paid to, say, Halliburton. But because it’s Big Labor, no one seems to have noticed.

Delusions of Mediocrity

Ladies and Gentlemen. If you ever want to know just how deeply some people drink of the Obama Kool-aid, take a look at this image someone just sent me.

I know that’s probably hard to read, so I’ll take the claims one at a time so you can appreciate the delusion:

Three million new private sector jobs. This number sounds accurate enough. But over 40 months, that’s less than population growth. Job recovery has been very slow under this Administration, far slower than any previous recession since the Great Depression. You can argue it could have been worse — I wouldn’t, but at least it’s an argument. But I really wouldn’t be talking about jobs with this guy.

Smaller government. By what standard can you say we have smaller government? Is government spending less than it did before? Nope. Does it have less power than before? Nope. It has slightly fewer employees, but that’s mostly on the state level.

$2 trillion deficit reduction. Maybe in Fiscal Fairy Land, where you project that the Iraq War will continue forever and future Congresses will exercise the spending restraint that current ones won’t. And even this is only after the Republicans dragged him kicking and screaming to the table. But $4 trillion has been added to our debt in the last three years and he walked away from Simpson-Bowles. Again, I wouldn’t be talking about deficits if I were you.

Health Care Reform. Fair enough. He did it. Of course, he came up with something even worse than we had before. But in LiberalLand, doing something is the most important thing.

Wall Street Reform. See above. It was written by the two Congressmen most involved with the banking industry. And the “too big to fail” banks are larger than they were when Obama took over.

Saved the US Auto Industry. By screwing over investors in favor of unions, yes. And only if you assume the industry would have disappeared in a normal bankruptcy, which I don’t.

All “bailout money” returned, with interest. All right, now I’m really starting to get pissed off. First off, what’s with the fucking quote marks? It was bailout moeny. This isn’t some Tea Party delusion. This was fact. And that it has been paid back is a myth. Many of the banks did so from other federal funds. And Fanny/Freddie are still hundreds of billions in the red. Really, I wouldn’t talk about bailouts if I were you.

Three new trade agreements, Repealed “Don’t Ask, Don’t Tell”, Killed Osama bin Laden, Rescued American hostages: I have no complaints here. All true. All accomplishments. He dragged his feet on the trade agreements but … they are in place now.

Toppled Gadhafi without an American casualty. I’ll give a little bit of credit. But let’s also note that this was done without Congressional approval in violation of the War Powers Act, something even Rachel Maddow called him out on.

Unified the world against Iran. Uh, OK. Still hasn’t stopped them, has it? Maybe in his second term, he’ll send them a strongly worded letter.

Has the Arab League watching Syria. No word on who is making the popcorn. Just last week, we saw an absolutely brutal atrocity committed by the Syrian government. The Arab League sat on their hands.

No tax dollars spent on BP clean-up. Semi-true. The taxpayers do finance a fund to cover any liability for spills over $75 million. And really, this is like saying he didn’t wet the bed. The taxpayers shouldn’t be paying to clean up BP’s mess. It’s not like there was some great public clamor that Obama resisted. So he didn’t do something we weren’t planning to do and that one wanted done anyway. What does he want, a cookie?

More deportations than Bush. True enough, but illegal immigration has been slackening due to the weak economy.

Fewer regulations than Bush. It’s only year three. And many of the regulations, like those connected with Dodd-Frank, have yet to be written. And really, let’s just stop this right here. Saying “I was better than Bush on issue X” is like saying you’re skinnier than Roseanne Barr. There were innumerable issues where Bush screwed the pooch. I’m really not that impressed that you gave it some foreplay first.

Support’s states’ rights on medical marijuana. As you can guess, this is what set me off. I startled the cat with my cry of, “What the fuck!”. Barack Obama has been horrible on medical marijuana as we have documented many times. His agencies have threatened forfeiture of people who lease property to legal dispensaries. His IRS has disallowed business expenses for clinics. They have launched numerous raids and clinics in Denver and Washington have shut down out of fear of raids. They rebuked the Ogden memo. It is right here where this piece of shit crosses from “propaganda” to “outright brassbound lies”. Much of the other stuff — deficit reduction, for example — is “true” in Washington’s reality (e.g., $2 trillion off projected debts == $2 trillion in deficit cuts).

But this is a lie. This is false. This is bullshit. And anyone who says this needs to smacked upside the head with a lighted bong. I’ve recently seen this lie coming up in numerous places, including the mainstream media and the Center for American Regress. The Administration, having throughly violate their promises on pot, are now trying to persuade us that, no, they really kept their promises.

You can’t stomp on lies like that hard enough.

Ended the War in Iraq. On Bush’s timetable, but sure.

Reduced military spending by $500 billion. Isn’t that the same thing as the above?

Increased veterans’ benefits every year. Because we know how much Congress fights against automatic benefit increases.

Saved the world from global financial collapse. Oh, really? Look, you can’t blame Bush for TARP and then claim credit for the supposed effects of it. And I would say that global financial collapse is still very much on the table.

Hired more border patrol agents than Bush. Hey, this one is true! Amazing that one of the few true claims on this involves … expanding government.

and he quit smoking. Well, OK. Good. Although he is slowly driving the rest of us to drink and smoke.

Now let’s list the things not on there: funded green energy initiatives that funneled money to politically-connected interests like Solyndra and Tesla; massively expanded the drone war including the targeted assassination of an American citizen; entrenched policies on indefinite detention and rendition; blew the stimulus on tax cuts for people who don’t pay taxes and subsidies for the states; has been spent most of three years campaigning for four more; made numerous goofs on “Polish death camps” and bows to various royalty; continued the expansion of federal raids to include raw milk and guitars. And that’s just off the top of my head.

Debunking is fun but what really alarms me is the thinking behind that graphic. Only a handful of those are true and even those often include governmentspeak distortions. And several of those points: smaller government, TARP paid back, medical marijuana — are outright lies. You have to be deranged to take some of Obama’s biggest failing and proclaim them as successes.

And they think we’re crazy.

The Taibbi Plan

Matt Taibbi, one of the key members of the More Clever than Smart Club, has an essay on what he would have OccupyWallStreet demand. It’s making the rounds. Let’s go through it. I’ve almost finished reading The Big Short, a book you really should read to understand the recent financial crisis. So this will serve two purposes: responding to Taibbi and talking about what I learned from Michael Lewis.

1. Break up the monopolies. The so-called “Too Big to Fail” financial companies – now sometimes called by the more accurate term “Systemically Dangerous Institutions” – are a direct threat to national security. They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined. There are about 20 such firms in America, and they need to be dismantled; a good start would be to repeal the Gramm-Leach-Bliley Act and mandate the separation of insurance companies, investment banks and commercial banks.

I don’t entirely disagree with this point. I thought as much in 2008 when we were told we had to bail out companies because they were “too big to fail”. If that’s the case, we need to stop them from being so big. We’ve broken up monopolies before; I don’t see why we should stop now.

That having been said, I’m dubious that this will achieve anything. As Reihan Salam points out, other countries have done fine with the same system. This idea hinges one whether you accept the idea that companies are too big to fail. I’m not sure I do.

2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about. It would also deter the endless chase for instant profits through computerized insider-trading schemes like High Frequency Trading, and force Wall Street to go back to the job it’s supposed to be doing, i.e., making sober investments in job-creating businesses and watching them grow.

Several problems with this one, which is a favorite of the Left. First, a transaction tax will never go away after it’s “paid” for the bailout (which is already mostly paid back). It will stay with us longer than the phone tax that was instituted for the Spanish-American War and was repealed in … 2006. Moreover, the biggest outstanding bailouts are Chrysler, GM and Freddie/Fannie. How is a transactions tax going to punish them?

Second, the big problem here was not high frequency trading, which is a minor irritation. It was the entire system acting stupidly with mid- to long-term investments. Credit default swaps and collateralized debt obligations were sold with the anticipation of years of risk-free revenue. Howie Hubler didn’t lose $9 billion on high-frequency trading; he lost it betting on huge CDO’s.

Which brings me to a point that Taibbi doesn’t address at all — the ratings agencies. Michael Lewis makes it crystal clear that the ratings agencies — S&P and Moody’s — had no fucking clue what was going on. They would give ratings to mortgage bonds without bothering to find out what was in them. In fact, they specifically told their employees not to look. The result was that tranches of triple-B mortgage bonds were put together into CDO’s that they rated AAA. People — investors who were interested in “making sober investments in job-creating businesses and watching them grow” bought these, thinking they were as safe as Treasury Bonds. They clearly weren’t. And not only did the ratings agencies not suffer for their massive failure, Dodd-Frank strengthened their control of the market.

The primary influence of Wall Street on the financial crisis was that high-stakes mid-term gambles brought banks to their knees and they “had” to be bailed out. But perhaps an even greater influence was that the mortgage bond market created an upward suction on the mortgage market. People were making billions off of mortgage-based securities. To feed that money engine, more mortgages were needed. This created not only immense pressure but immense profits for mortgage brokers who sold people houses they couldn’t afford, sold them on bad ideas like option loans and sold no-document loans. The mortgage sellers didn’t care if the loans were good because they were selling them right to Wall Street. Wall Street didn’t care because they were selling them to each other.

Yes, there was pressure from the Community Reinvestment Act and ACORN. But that was a comparatively small effect. The tranches that did in the big banks and crashed the system were Alt-A: mortgages sold to people who had good credit scores. Everyone knew the mortgages sold to poor people were bad; it was the mortgages sold to middle class and wealthy people that broke the system.

A transaction tax does not address this problem at all. What would have addressed it was letting the banks go bust. People who bought bad mortgages suffered — they lost their homes, their credit rating and their savings. That’s what should happen when you let the bank talk you into doing something stupid. But the banks didn’t suffer.

Here’s a better idea that would replace Taibbi’s points (1) and (2). Rewrite Dodd-Frank so that any company that is bailed out in future has to fire their Board of Directors. Rewrite it so that companies that are bailed out will be eventually liquidated or broken up. Re-inject moral hazard so that companies see bailout as a last resort, rather than a first one.

3. No public money for private lobbying. A company that receives a public bailout should not be allowed to use the taxpayer’s own money to lobby against him. You can either suck on the public teat or influence the next presidential race, but you can’t do both. Butt out for once and let the people choose the next president and Congress.

I have no problem with this … if it includes agencies like ACORN that get loads of public money as well as public employee unions and public employees and government contractors (which would often include me). What Taibbi wants is to single out only some of the people sucking on the public teat; the ones he doesn’t like. Everyone else can go ahead.

4. Tax hedge-fund gamblers. For starters, we need an immediate repeal of the preposterous and indefensible carried-interest tax break, which allows hedge-fund titans like Stevie Cohen and John Paulson to pay taxes of only 15 percent on their billions in gambling income, while ordinary Americans pay twice that for teaching kids and putting out fires. I defy any politician to stand up and defend that loophole during an election year.

I sort of agree with this one. I see no reason why a businessman earning half a mil in salary should be taxed at twice the rate of a hedge-fund manager. The carried interest rule was a mistake.

However, I doubt this will actually work. People do not get rich by allowing the government to figure out how to tax them more. And the carried interest rule exists for a reason. Jim Manzi has pointed out that it would be child’s play for hedge fund managers to shift the funds so that they become capital gains or other forms of equity.

A better idea would be an overhaul of the tax system that keeps it simple and eliminates the complexities that allow income to be sheltered and fed the financial doomsday machine.

5. Change the way bankers get paid. We need new laws preventing Wall Street executives from getting bonuses upfront for deals that might blow up in all of our faces later. It should be: You make a deal today, you get company stock you can redeem two or three years from now. That forces everyone to be invested in his own company’s long-term health – no more Joe Cassanos pocketing multimillion-dollar bonuses for destroying the AIGs of the world.

This would be a huge mistake, I think. We have attempted this before and the result has always been bad Unintended Consequences. If you force them to get company stock, what’s going to happen? Well, precisely what happened in the 90’s — a stock market bubble. You’re going to have CEO’s deliberately or fraudulently inflating their stock so they can cash out.

The principle is also warped, in my opinion. If a company wants to pay bonuses to people before they do anything, let it be on their own head. We already have “say on pay” thanks to Dodd-Frank. As long as we don’t bail them out — or at least make bailout conditional on canceling bonuses — this problem will take care of itself. We don’t need to stop companies from being stupid; bankruptcy will do that for us.

This post and my response circles what I’m thinking about OWS. It is a typical liberal event. They have correctly identified the problem: big business has too much influence in Washington and vice-versa. But they are dumb as a bag of hammers when it comes to the solution. Taibbi’s proposal, lauded in liberal circles as “restrained”, would inevitably create another bubble, would create massive legal challenges that would tangle up the courts and would not address some of the biggest problems: the ratings agencies and the government’s willingness to cover up the stupidity of investors.

We turned down this road with TARP. Now is not the time to double down. Now is the time to work the problem.


That’s apparently one idea that the OccupyWallStreet crowd are keen on: an expansion of the stupid “get rid of student debt” idea I flayed a couple of weeks ago.

So my immodest proposal is simply this: Individuals and households in the bottom 99 percent who owe debt to any large financial institution that received federal government support during and after the 2008 crisis should see their debt forgiven. That would certainly stimulate the economy, as most people would suddenly find themselves with a great deal more money to spend on iPads (and food, and clothing, and housing, and healthcare). The debt can be forgiven by decree or if the government really wants to it can step in to pay it itself; I don’t much care either way. (Though it’d be nice to see it just wiped off the books, to enrage the banks.)

Let’s wipe the debt of the 99 percent off the books, tell the financial sector to eat it, and get on with our lives.

I can’t even call this Keynsianism. This is pure plunder. Pareene and his numerous supporters can proclaim this to be a stimulus all they want. But one man’s debt is another’s asset. The banks would suddenly be out trillions of dollars in capital and we might trigger bailouts all over again. Your debt would be gone; and so would your job. And the moral hazard would be extreme. Who would want to loan money in the future, knowing the debt could be erased any time a bunch of dirty kids occupies a New York thoroughfare? Indeed, if you look at the history of the jubilee, you’ll find this became a big problem and loan societies had to find ways around it. If God can’t make people loan money before a jubilee, how is Barack Obama going to?

(I’ll leave to you the irony of a bunch of liberals invoked Biblical law as a precedent. Or a bunch of supposed non-partisan activists calling for the most massive forced redistribution of wealth in history. Or the fact that since the cutoff for “the 99%” is half a million, most of this debt relief would be going to people with pretty solid incomes, not the poor and unemployed.)

Now the justification for this is TARP and the Wall Street bailout. Several people, Erin Burnett notably, have pointed out that the bailouts weren’t just a handout; the banks paid back their loans. But I think that too misses the point. The bailouts were a mistake, not a model for what should be done with the rest of the country. Our Congress didn’t even bother to attach conditions for taking the money, such as firing directors or canceling bonuses (actually, Chris Dodd made sure AIG bonuses were protected). The proper response to a dumb idea is not to follow it with an even dumber one.

Look, I understand the anger OWS are feeling and entirely sympathize. The banks are too big; the financial sector has far too much political power. Banks are sitting on piles of cash while some people are entering their third year without the hope of a job. It’s tough. Every night, I think about how lucky I am to have work.

But burning the house down isn’t the answer.

(McArdle has a decent idea: change the law so that student loans can be discharged in bankruptcy. They are presently the only loans that can’t be. Student debt has quintupled in the last decade and Big Education is becoming a huge bubble. Maybe it’s time to let the air out.)

As I said before, the OWS crowd is still organic, still figuring out what they stand for. But if this is the best they can come up with so far, maybe Herman Cain is right about them.

Ain’t that a bitch?

Guess who so far has ended up being the biggest beneficiary of the Dodd-Frank financial regulation law? For those of you not familiar with Dodd and Frank, here is some background. Chris Dodd was a senator from my state, Connecticut, and one of the instrumental people behind the previous laws and government push to force lending to high risk people in his political career, ending up as the banking committee chairman (better to rob us blind!) right at the time the crisis happened. His meddling, in the name of “social justice”, but always while larding his friends and donors with government largesse, made him an instrumental player in setting the stage for the practices that led to first the housing and the following economic collapse back in 2007/2008. Dodd also was the guy that put regulation in the “must have” bailout plan to protect the big wigs and their bonuses at AIG. He was mired in one scandal after another, and basically decided not run for reelection in 2010, opting instead IMO to go steal people’s money doing something else.

Barney Frank, is a representative from Massachusetts. In addition to having the distinction as the only congress critter that dated a guy that run gay prostitution ring from their shared residence, he was also the head architect behind the scandalous and criminal repackaging of high risk loans, to make them palatable, through the government owned and run, but mysteriously categorized as private sector entities, Freddie Mac/Fannie Mae, and a key player in protecting Freddie & Fannie from any serious scrutiny – another one of his lovers was put in charge of running one of those – by accusing those pointing out the problem of being racists, until the whole house of cards came tumbling down.

As a reward for their roles in the horrible crisis and economic collapse it cause, these two where allowed, well they demanded, to be given the reigns of power, to produce the new series of regulations which they told us would prevent another crisis like the one their previous involvement caused. As expected, they didn’t do anything to end either the idiotic practice of having governments force lending institutions to give loans to high risk people looking for a loan, or to address the massive problems at Freddie/Fannie, but created a slew of regulation in a bill with over 2300 pages of bullshit, designed to allow people in government to increase their ability and power to pick which businesses would be winners and whom the losers. In return for some large donations, of course. So, don’t be surprised that the clock is already ticking on the next economic implosion, courtesy these two morons.

But back to the original question: guess how is making out real good because of the Dodd-Frank’s financial regulation law? Well, the very people involved in writing the rules then turning into evil lobbyists, of course.

It may not prevent another bailout or protect consumers from dangerous financial products, but the Dodd-Frank financial regulation law — now one year old — has already benefited one group of people: the government officials who wrote and implemented the law before cashing out as lobbyists or consultants for Wall Street, hedge funds and big banks.
The top staff lawyers in charge of crafting the legislation in both chambers of Congress have both left Capitol Hill for K Street, as has a Securities and Exchange Commission staffer who helped implement the law. This is “private-sector job creation, Obama-style,” as blogger Ira Stoll drolly notes.

The Great Wall Street Cashout is another example of how President Obama’s agenda of bigger government — and congressional Democrats’ style of leaving the key details up to executive-branch regulators — accelerates the revolving door and breeds crony capitalism.

Dodd-Frank was supposed to prevent future bailouts, tamp down on excessive risk taking by financial institutions and, through a new agency called the Consumer Financial Protection Bureau, protect regular people from predatory lenders or harmful and complex financial products.


Seriously. Why is this news? It’s of the “Dog bites man” variety. The very regulators engaged in writing this piece of garbage leave government, become lobbyists, and then rake in the cash? Who would have thunk that!

I can’t blame these guys for pulling this stunt, but I certainly can go off on the next leftist asshole that tells me how evil capitalism or Wall Street is. These government scumbags and their games make those guys look like pikers. Remember, Wall Street, or for that matter any other business/economic power center, can only do the things people in government write laws to make them do. We got more of the same in the healthcare takeover by government bill too. If we really wanted to curtail these kinds of bad practices, what we should have done is removed the power from government, by removing as much involvement by them from the equation. Instead we did exactly the opposite. Go figure.

What’s the definition of insanity again?

Isn’t it doing the same thing over and over, but expecting a different and contrary result? Well, if that’s the case, then the Euros are insane. The Euro is getting hammered and the S&P has downgraded Greece’s rating 2 notches yet again – they obviously are certain a Greek default is a question of when, not if – with several other southern European countries heading the same way, and what do they do? Well, they double down on the stupid and are looking to provide more bailouts for the Greeks. What is the damned incentive for the Greeks to live in their means after that?

Shit, go ahead and keep running debt up and spending money you don’t have on the big collectivist state Greeks! What are these other losers gonna do? Cut you off? Watch the EU crumble around them? Nah, they are so desperate to keep the fantasy of the EU and the collectivist nanny state alive, for as long as possible, that they are simply not going to even blink at the fact that the Greeks are thumbing their noses at them and their demands for austerity measures. It’s a free ride for all of you, man. And Italy, Spain, Portugal, and even Ireland are on notice not to try to hard to fix their fiscal madhouses either. Spend like there isn’t going to be an end to the free money ride! More bennies for the slackers! Retirement at 50 for everyone but government employees: they can retire at 45! 25 hour work weeks for all! Free healthcare till you get old enough that they figure euthanizing you is the humane thing to do! And most important of all, have Uncle Sam keep paying for your defense and the bank bailouts!

Seriously, this is where we are it seems too. It’s going to be an ugly few decades with the nanny states basically unraveling across the globe. The people that want the free ride ain’t gonna give it up. There are rich people to fleece, don’t ya know! Hold on to your horses.