Looting

The inevitable outcome of the bailout logic. What were investment bankers supposed to do? Their operating paradigm was literally a joke:

For the last couple of years, the running joke on Wall Street was “Dubai, Mumbai, Shanghai or goodbye.” If you were the C.E.O. of a troubled investment bank desperately looking for cash, you made a pilgrimage to one of those three cities with hat in hand. They were the places most likely to write a quick billion-dollar check; their eagerness should have also been a tip-off. Now you have to wonder about Mumbai and Shanghai, too. Are they next in line to take a fall?

Back in the gasping comedown from the bailout frenzy, I remember listening to a story on NPR detailing the overseas sojourns of $100 billion in bailout cash. The reporter and those he interviewed were actually surprised at such a thing.

It was logical for the money to flow out. Things were looking nasty here, and besides, the U.S. isn't the only ticket to growth.

Aw shucks man, hate to say I told you so, but I have only been making this point here on the Cafe now for 2 plus years.

The only difference between us now is just words. You use the phrase "it will destroy", I use the phrase "it has destroyed". Not much difference but you are still playing catch-up.

No change or fix will be permanent until this is changed and new language enforced - U. S. Constitution, Art 1, Sec 5. Para 2, first phrase "Each house may determine the rules of its own proceedings:,....... and, until that is changed any fix will be subverted in short order.

New language, "Each house may draft the rules of its own proceedings which will then be offered to the public in a national referendum for approval, with a 2/3 majority being necessary to approve said rules. No rule will be drafted or presented that denies equal representation to each individual member of either house, and unimpeded access to a full house vote on bills submitted, and cosponsored by a house member in a state separate from the original drafter. No committee will be structured in such a manner to deny equal access to the full house on any issue by any individual member of the appropriate house, nor will any member of a committee be empowered to deny access to the full house vote by delays or rejection of bills properly submitted by any individual member of the appropriate house. Any future changes to said rules will also be offered to the public in a national referendum with the same majority being required to become operational. Operating rules of each house will be resubmitted to the public for approval in a national referendum every eight years from ratification of this amendment."

If we the people do not nail them down with something similar to what I just proposed, they will only wriggle away and begin screwing us again.

Me likey.

Welcome your new leaders and overlords. Welcome to Multinational Corporate Rule.

There you go! Democracy is working muir. It's just a matter of finding the right people. St. Barack Obama is the change you can believe in. he will get you the Nirvana you were believing for. He is the savior of the world. Say 5 hail Obamas every night.

mmmmmmwwwwwwwwwwaaaaaaaaaaaaaaahhhhhhhhhh.

Welcome your new leaders and overlords.

Yes, Barack was the official candidate of the thick headed libertarians on this blog. Democrats were their official party.

Love you man,

"Look in my eyes; what do you see: I'm the cult of personality. I know your anger, I know your dreams; I've been everything you want to be. Oh, I'm the cult of personality..."

You need more syllables in your "mmmmmmmwwwwaaaaahhhhhhh." The way you wrote it sounds like gas escaping. It should be more like mmmwaahahahahahahahahaha!!!

I don't understand this, how can both Obama and Gore be saviors? Your going to have to explain this theology to us lowly peons. We need experts to show us the way. Save us....your our only hope!

can't we have co-saviours? Maybe it's a father, son and holy ghost type of thing.

I was thinking that too...or we can go all Polytheistic?

there you go! You also need to remember that St. Barack Obama is the savior of the environment - from impending disaster of hot hell on earth. Saving an indoor ski slope in the middle of one of the biggest and hottest deserts on the planet is in the interest of the environmental movement - sort of like Noah's ark. Proles need to be kept out through regulations.

Frustrating, sad, and scary.

Russ,

As to when something will finally give, I'm reminded of your Econtalk podcast with Milton Friedman. You asked him what he feared the most; Friedman's reply was that in the face of a huge national debt (I believe he referenced the huge Social Security payments that will be due to future retirees), some naive leaders would believe that the solution is to simply print money....and they'd be stupid enough to do it. I'm afraid that's where we're heading, and that's what's going to give.

It's ok; printing money is merely "an accounting device," with no real-world consequences. Fuggedaboutit!

It's ok; printing money is merely "an accounting device," with no real-world consequences. Fuggedaboutit!

We aren't heading there. We're already over the precipice and tumbling toward the abyss.

I think Milton Friedman would have differentiated between a debt monetization and an accomodating monetary policy during a deflationary depression. Otherwise his entire career becomes very disjointed and confusing!

OH MY GOD OH MY GOD, DO YOU EVEN EVER LISTEN TO YOURSELF? What government agency or politician do you personally work for?

Why does this keep coming up? I've never worked for a government agency or a politician a day in my life. I've never even put a campaign bumper sticker on my car (I did put an Obama bumper sticker on my laptop bag for the week before the election... probably the closest I've come to working for a politician). My (yes I know, relatively short) career has been composed of jobs at five private companies - four for-profit, one non-profit.

Besides... since when do you have to work in government to respect Milton Friedman's thoughts on monetary policy? Since when do you have to work in government to not like debt monetization? These are pretty widely held perspectives.

You claim not to like "debt monetization" yet you're for quantitative easing? They're the same thing for different purposes! You think the debt doesn't get monetized when there's "accommodating monetary policy during a deflationary depression"? Anyway, inflation is inflation is inflation. No excuses. So...NSA or CIA?

Bumper stickers don't stick to laptop bags very well... I advise just going with the bumper in the future.

Is "private company" codeword? It's the CIA, isn't it? Got ya!

Who knew that Bernanke's hero was Gideon Gono, not Milton Friedman.

Think about this though, Zimbabwe doesn't have a Central Bank anymore.
Always look at the bright side right?

Mugabe said the Zimbi-Dollar will be back by Christmas:
http://allafrica.com/stories/200911191112.html

LOL!!

Things needn't get nearly as bad as Zimbabwe to be worse than anything I've experienced before.

I completely agree with you. My statement was tongue in cheek.

The numbers boggle the mind. Only a few years ago, we were discussing the perils of projected deficits for Social Security of only a few trillion dollars over 75 years (if we can believe the "trust fund"). Now, we expect similar budget deficits over two or three years, plus a trillion dollar health care reform, continued imperial expansion, incredible bailouts for incredible amusements for incredibly wealthy emirates and all the rest.

We can't keep even the most essential of these promises anyway, so why not go hog wild?

Yesterday, I heard some heroic Congressman proposing a one to five percent "surcharge" on everyone's income to finance the Afghan surge, but one to five percent presumably isn't close to the tax increase required to keep all of the promises our statesmen have already made to everyone under the sun, from state and municipal pensioners to Dubai playboys.

If Congress now cuts Social Security benefits to service the bailout of Citigroup and BofA and all the rest, no politician in any party is safe. No, it's not the failure of market economics, but it is the collapse of Capitalism as we've known it for decades, and I hate to think of what's coming next, because that won't be market economics either.

Is that 1 to 5% or 1 to 5 percentage points?

The Emerites and middle eastern inter-family politics is confusing, but I believe the Emir of Abu Dahbi (where the oil is) is the cousin of the Emir of Dubai. Abu Dahbi is sitting on around $600B or so of liquid assets which it can use to pay off Dubai's debt. Normally, that's what would happen.

It's not happening, though. I can't help but wonder if it's not happening because they figure the creditors will just be bailed out by their central banks again. Moral Hazard writ large.

A portion of the our bailout was loaned to Dubai, which will likely need a bailout to pay it back?

My head is spinning.