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March 31, 2009

Just To Be Fair…

Some have accused President Obama of applying a double standard to the Automobile industry as compared to the comparative kid-glove treatment he has afforded Wall Street.

To address this serious charge, the President needs to demonstrate that he cares as much about “Main Street” as he does “Wall Street.” Here are a few things he could do:

Launch a new TARP for Detroit: Toxic Automobile Relief Program

The primary problem facing American vehicle manufacturers is the mountain of toxic automobiles sitting on their balance sheets. 

And dealer lots.

With all this capital tied up in toxic automobiles, manufacturers simply don’t have the resources to go out and make new cars

Who’s responsible? Some accuse the rating agencies, such as JD Power, for inflating the scores on certain toxic automobiles. Others blame Barney Frank.  Why?  They’re just tired of seeing him on TV.

But rather than place blame, it’s more important that we find a way to get these automobiles off of Detroit’s books.  One obvious method would be to mimic the Public-Private Partnership proposal for banks, perhaps creating a fund together with a company like Hertz, which could then purchase these toxic automobiles and rent them to vacationing retirees in Orlando. (Just tell them it's a Caddy, put on the left turn signal, and send them on their way.)

COPE for Car Owners

Like the HOPE for Homeowners program it would be patterned after, COPE for Car Owners would try to forestall any additions to the existing inventory of toxic automobiles by offering incentives to keep responsible car owners in their cars, where they belong. How can we tell that a car owner was responsible and simply made an honest mistake purchasing a toxic automobile or was otherwise bamboozled by an unscrupulous salesperson?

No one buys a Lincoln Mark LT on purpose.

What kind of incentives might entice people to participate?

Presidential Floor Mats We were thinking maybe a nice set of floor mats.

The program will be expensive, but if it can help just one family, it would be worth it.

Which is pretty lucky, since the original HOPE for Homeowners program has helped exactly that.  One family.

And to think, we were all a part of it. Because we had to be.

Limited Oversight

The automobile industry needs one of those of watchdogs without any real authority, like the one overseeing the TARP funds for Congress.  This Auto Task Force Group has real powers! They just freaking fired Rick Wagoner!  These TARP guys can’t even get a phone call returned.

Federal Reserve Purchases of Toxic Automobiles in the Marketplace

If the Federal Reserve can print up money and buy securities to help the fat cats on Wall Street, it can certainly run the presses a few hours longer to take some of the supply of toxic automobiles out of the market.

Besides, we think Ben Bernanke would look pretty spiffy in a PT Cruiser Convertible.  (Hey, look who’s in back! Awwwww...)

Ben in his PT and Timmy Too!

A Term Asset-Backed Loan Facility for the Automakers.

Like the facility created for the banks, the Federal Reserve would offer loans based on certain assets the automakers pledge as collateral. To work, assets that would be allowed into the program would necessarily have to include such things as tool and die equipment, parts inventory, and a large number of boxes of  “Together-4-Ever” Mitsubishi Raider-Dodge Dakota marketing swag.

If the federal government insists on propping up every failing business in America, they might as well be fair about it.

Speaking of propping up failing businesses, we could use some of that TARP love ourselves…

J.

March 31, 2009 at 05:20 PM in Current Affairs | Permalink | Comments (2) | TrackBack

March 30, 2009

Barack Obama: Human Resources Manager-in-Chief

Barack Obama decided to make some long-anticipated, and urgently needed personnel changes today in an effort to get his economic recovery plan back on track.

No, he didn’t fire Tim Geithner.

He fired General Motors CEO Rick Wagoner.

Now before you get all paranoid about some kind of a socialist government takeover, President Obama made it clear that “We have no intention of running GM."

Well, aside from who should be the CEO, who should serve on the board, what union workers should be paid, how much bondholders should get, what kind of cars should be built, and how warranties will be serviced.

But other than that, let laissez-faire-style free market forces have the run of the place!

It’s not like the government is going to tell them what color to paint their cars or anything nutty like that.

Except maybe in California.

President Obama is depending on advice from his administration’s Auto Task Force group, headed by Steven Rattner who is uniquely qualified for the post having not only years of experience donating money to the political campaigns of Democrats but also has direct business experience losing money in media investments through Quadrangle, his former private equity firm.

Despite Wagoner’s firing, the White House appears to be ready to help GM, however it appears equally ready to let Chrysler, owned by private equity investor Cerberus, fend for itself with the very real possibility of bankruptcy.

This was based on Rattner’s exhaustive examination of Cerberus’s detailed debt financing plans, although it’s not 100% clear if Rattner was looking at Cerberus's financing plans for Chrysler, or Cerberus's financing plans for Maxim, a Quadrangle-owned magazine property Cerberus loaned $125 million to and had been giving Rattner quite a bit of trouble about getting its money back prior to his appointment to the Auto Task Force.

Ever cheat someone at poker or steal their girlfriend?  And then they become your boss?

How did that work out?

Word this afternoon is that Chrysler is quickly moving forward with its proposed alliance with Fiat. Details have not yet been worked out, but we expect Cerberus's equity investors will retain full rights to “Employee Pricing Plus Plus” on any 2009 Dodge Caliber in dealer stock along with complimentary pin striping.

Somewhere in Chrysler CEO Robert Nardelli's office...

You Are Screwed

J.

March 30, 2009 at 03:43 PM in Current Affairs | Permalink | Comments (1) | TrackBack

March 29, 2009

Epilogue: Moron Hour

We would like to thank Al Gore for his unexpected participation in “Moron Hour” last night.  While he didn’t have every light turned on, he did leave the outside floods burning to illuminate his landscaping which is at least good for some extra credit if only for the effort.

Which brings us to our first, and what will surely be our last, incarnation of,

Bad Al Gore Jokes for a Sunday Evening:

Why did Al Gore cross the road?
He was trying to get away from Bjorn Lomborg.


How many Al Gores does it take to screw in a light bulb?
Two.  One to screw in the light bulb, and one to preach against the evils of screwing in light bulbs.


Why is Al Gore eligible for TARP funds?
Too big to failHe’s too big to fail.


The Easter Bunny, Al Gore, and Nancy Pelosi are all lost at sea on a raft. Who survives? 
Nancy Pelosi, because everyone knows the Easter Bunny and Global Warming don’t exist.


Knock knock .
Who’s there?
Al Gore.
Get the hell off my property.


We’ll stop now.

J.

March 29, 2009 at 08:03 PM in Global Warming with CONSENSUS WATCH | Permalink | Comments (0) | TrackBack

March 27, 2009

What If Your Light Switch Has a Hanging Chad?

All across the globe, “Earth Hour” is under way in which people are being called upon to use “their light switch as their vote,” by turning out all their lights for 60 minutes, this Saturday, between 8:30 and 9:30 PM local time, wherever they might live.

In this manner, you “Vote for Earth.”

Organizers believe that not only will this event clearly demonstrate people’s desire to celebrate humankind's great achievments by sitting in the dark like animals, but also that huge savings can be had.  In fact the United Nations calculated that it would save $81,000!  Sure, that’s about 800 times the actual savings, but we’re talking climate science here, not “regular” science.

Last year, we here at Planet Moron celebrated this attack on the clearly malevolent light bulb, widely considered to be the scourge of our modern existence (and perhaps one of the most significant inventions in human history but that's no reason to let it interfere with our self-congratulatory condemnations right now) by privately turning on every light in the house.

On reflection we realized that to run around turning on all the lights for an hour was a juvenile, meaningless act of rebellion, utterly pointless beyond confusing the dogs (a low hurdle to be sure).

That is why this year, we are dispensing with this childish exercise in futility, and instead plan to do something more productive.

And ask you to join us in:

Moron Hour MORON
HOUR

2009




Taking part in Moron Hour requires that you turn on every light in your house.  This actually has three benefits:

1) Helps balance the load on the electric grid from the sudden and possibly disruptive drop off in demand from guilt-ridden McMansion dwellers as they frantically unplug their compact fluorescents (which really helps the color saturation on the 60” plasmas anyway).
2)
Makes way fewer horribly underexposed pictures when, as the Earth Hour people curiously ask, you take photos to document your celebration.
3)
Confuses the dogs.

Yes, others are taking more high-minded approaches to counter-demonstrating Earth Hour, such as the Competitive Enterprise Institute’s “Human Achievement Hour.”

However, we realized upon reflection that such an approach suffers from having just way too many syllables. 

Don’t these guys know it’s the weekend?

VOTE MORON So help us celebrate Moron Hour.  Spread the word.  Steal our graphics.  Send us pictures of your personal celebration of Moron Hour (email in upper left-hand corner) and we’ll post them right here. (We’ll be in the house to make sure nothing catches on fire.  That shouldn’t.)   Special consideration will be given to photos that depict lights needlessly being left on in empty rooms and the gratuitous burning of random chunks of coal (extra points for bituminous).

Proponents estimate that up to one billion people will take part in Earth Hour. Using the same rigorous analytical methods they do, we here at Planet Moron estimate that up to eleventy gazillion people will take part in Moron Hour.

And yes, we know this is short notice, but we were very busy today trying to decide what would be the most appropriate drink tonight to kick off the worldwide celebration of an event that assumes only human intervention could possibly affect climate.

Tequila Sunrise Answer: Tequila Sunrise.

UPDATE, T-Minus 2H 50M: Proponents of "Human Achievement Hour" are asking that you celebrate it by "surf(ing) the net for information about great advances, watch a History Channel documentary..."

Sure, you could do that.

OR, you could celebrate "Moron Hour" instead and turn all your lights on and start drinking.

The "achievement" part comes in if you can remember to turn them all off before you pass out.

(Some people have to over think everything.)

UPDATE, T-Plus 12M: We don't know about you, but our irisis are like pinholes right about now. Time Magazine writes, "Global warming may never get its perfect picture — Earth Hour, a globe gone dark, may be the closest thing we'll have." 

Not sure if that's really great imagery...

UPDATE, T-Plus 3H 15M: Okay, so the tequila sunrises kicked in.  Hopefully you got all your lights turned off and the dogs unconfused.  Be proud that you did your small part in a completely pointless exercise.

The difference is, we know what we did was pointless.  Not sure about those other guys...

J.

March 27, 2009 at 10:14 PM in Global Warming with CONSENSUS WATCH | Permalink | Comments (9) | TrackBack

March 26, 2009

Like The Old Saying Goes, When You’re A Hammer, Every Problem Looks Like It Needs To Be Heavily Regulated…

We created a list of the major sectors of the American economy and ranked them in the order of how heavily regulated they are by the government, from most to least:

1. Financial Sector   
2. Every Other Sector   

Using the same economic sectors, we then ranked them in the order of how great a contribution they made to our current financial crisis, from most to least:

1. Financial Sector
2. Every Other Sector

Notice anything similar?

Yeah, neither do we. 

That is why we support the obvious need for more regulation of the financial sector.

Much more.

To start things off, Timothy Geithner testified before the House Financial Services Committee this morning, unveiling the first component of his proposed regulatory reform which was aimed directly at what he believes is the issue in most immediate need of attention:

Systemic Risk.

Systemic Risk refers to the grave damage that could be done to the entire nation’s complex interconnected system of campaign contributions were a single large firm to fail. From brokerage firms to banks to insurance companies, the very fabric of influence peddling could unravel in a very short time, creating a disaster that would be felt from one end of the country to the other, and by “country” we mean “K Street.”

Secretary Geithner’s plan to address systemic risk encompasses six specific proposals:

I. A Single Independent Regulator with responsibility over Systemically Important Firms and Critical Payment and Settlement Systems.

Up until now, our fractured, multi-layered regulatory system has helped create a series of different, totally disorganized financial crises, from the S&L failures of the late ‘80s and early '90s to our current crisis involving mortgages made to people who couldn’t afford them. With a single regulator in charge of everything, a much larger, better organized crisis involving every single element of our financial sector could easily be coordinated from right here in Washington.

Naturally, this regulator must be independent, like the Federal Reserve which is so completely 100% independent that Federal Reserve Chairman Ben Bernanke went on 60 minutes to demonstrate just how independent of public opinion and political pressure he is.

Hey, it’s not like he went on The View.

II. Higher Standards on Capital and Risk Management for Systemically Important Firms:

Given that the last time a single regulator took on capital and risk management of a select group of important firms, of the five, two went insolvent, one went bankrupt, and two more required massive infusions of federal bailout money and their conversion into bank holding companies, it is clear why such an approach must be expanded as soon as possible.

III. Requiring All Hedge Funds Above A Certain Size to Register

Since hedge funds had little to nothing to do with our current financial crisis, we have no other choice but to seek immediate government regulatory authority over them.  Only by opening up these funds to the regulatory whims of the political process can we ensure that low-income Americans will finally gain access to no-money-down credit default swaps, interest-only CDOs, and no-doc currency derivative contracts they can call their own.

IV. A Comprehensive Framework of Oversight, Protection and Disclosure for the OTC Derivatives Market:

The government will, for the first time, have regulatory authority over complex derivative securities so as to better manage “excessive risk-taking” on the part of financial institutions.  Of course, these financial institutions took excessive risk with the full knowledge that the federal government would bail them out and we could simply address the problem by removing this overhanging moral hazard by ending once and for all, the ability of the government to use taxpayer funds to bailout private businesses.

Unfortunately, it’s difficult to achieve Treasury's goal of expanding the federal bureaucracy under such an approach.  So instead, we'll create an army of GS-11s and GS-12s charged with trying to monitor a fast-moving, endlessly innovating market in financial derivatives. 

It will probably work out fine.

V. New Requirements for Money Market Funds to Reduce the Risk of Rapid Withdrawals:

Money market funds have long offered investors an alternative to federally insured deposits at commercial banks, providing some mixture of returns, flexibility or other advantages to compensate for the higher risk.

This simply cannot be allowed to continue, particularly since regulatory authorities have already demonstrated their oversight prowess with the banks.

VI. A Stronger Resolution Authority to Protect Against the Failure of Complex Institutions:

By giving the federal government the authority to step in if a firm is about to fail, we ensure that no firm is ever going to behave as if it should be concerned about failing again, and with its expanded scope, this won’t just apply to banks, but insurance companies, hedge funds, private equity funds, and others so that it will be understood up front that the best way to ensure maximum protection is to be as big and as reckless as humanly possible.

And yes, this is just the first component of Treasury’s plans.  There are three more to come in the months ahead.

Just in case you were looking into Costa Rica.

J.

March 26, 2009 at 07:50 PM in Current Affairs | Permalink | Comments (1) | TrackBack

March 25, 2009

We Think The Horse Head Was Probably Next

Reflecting populist outrage, New York State Attorney General Andrew Cuomo really hit back at those fat cat AIG executives and their fat cat bonuses, getting most of them to return the payments

Voluntarily, of course. He just didn’t want any unfortunate “accidents” to happen, like if he were to "accidentally" release their names to the public.  Now that would be a real shame.

So, what kind of fat cats are we talking about?  Fat cats like Jake DeSantis. Sure, he never worked on the credit default swaps that ultimately sunk AIG, and had been working for $1 a year based on repeated promises of a lucrative incentive bonus at the end, but that’s not the point.

The point is that he’s a fat cat who had all the advantages.  Such as being raised in an economically depressed area by schoolteacher parents, and then, based on nothing of note beyond hard work and sacrifice, securing financial aid to attend MIT where he took cushy classes in materials sciences and coasted on little more than his own sense of entitlement. And a thesis he wrote on Chemical Vapor Deposition of Iridium and Rhodium from Organometallic Precursors.

Talk about cruising down E-Z street. We should all be so lucky as to prepare papers on chemical vapor disposition of iridium and rhodium never mind organometallic precursors, right? It’s not like we’re talking rocket science here.  We think.

Contrast that with our hero of the hour, the rock star of justice, Andrew Cuomo, born to a struggling second-generation Italian immigrant who was so poor, he couldn’t even afford to buy his son the governorship of New York.

And yet look how far he’s come.  Not only did he have to go through the motions at one of the nation’s top law schools (bottom of the top, but still), but often had to say things like “I’m Mario Cuomo’s son” just to get a job.

And a marriage

And isn’t that something all hard-working Americans can identify with as they sit around the kitchen table, trying to decide whether they should skip making the mortgage that month just so they can pay the electric bill or how politically advantageous it would be to marry into the Kennedy family? 

Unlike greedy, thieving people like Jake DeSantis who think that just because they’re smart and accomplished, somehow expect that fulfilling the specific requirements of a job all of a sudden entitles them to receive pay that had been contractually agreed to.

What are we, a nation of laws or something?

No, the heroes we celebrate today are public servants like Andrew Cuomo, who with little more than the last name “Cuomo” has been able accomplish much of importance, like making sure the people who caused AIG’s downfall pay, even if they aren’t really the people who caused AIG’s downfall.

And hope that no one looks too closely at who caused the whole mortgage mess in the first place…

J.

March 25, 2009 at 03:21 PM in Current Affairs | Permalink | Comments (2) | TrackBack

March 24, 2009

PPIP: “Praying People Invest in the Program”

Yesterday, Secretary Geithner revealed the Treasury department’s long-awaited and much delayed solution to the “toxic” assets that are clogging bank balance sheets.

Unlike last year’s original, flawed plan which would have had the government purchase these toxic assets under a program called “TARP,” Secretary Geithner’s more innovative plan would have the government purchase these toxic assets under a program called “PPIP.”

It can take FOR-ever sometimes to come up with a decent name for these things.

That’s a little unfair.  In a departure from the original Troubled Asset Relief Program, Secretary Geithner’s Public-Private Investment Program (PDF file) would have private investors put up equity funds alongside the United States Treasury.  Those funds would then be leveraged up to 6-1, with the debt guaranteed or provided by the FDIC or Federal Reserve as the case may be.

As White House economist Austan Goolsbee put it, "We're sharing in a partnership form.”

Under this public-private partnership form, the public would be taking on about 94% of the risk, while private investors would be taking on the remaining 6%, making it more of a public-public-public-public-public-public-public-public-public-public-public-public-public-public-public-public-public-private partnership.

Okay, so maybe it’s less like a partnership. 

And more like a marriage.

But then, the whole point of the program is to have the taxpayers purchase assets that no one in their right mind would purchase, and make loans that no one in their right mind would make at interest rates no one would ever offer.

Because no one else is crazy enough to touch these things.

Call it, “institutionalized insanity.” The federal government is like your Uncle Mel getting a hold of your banking passwords and throwing away your kid’s college funds on alpaca farms, Nigerian wire transfer scams, and online pyramid schemes.

Except with an alpaca farm we'd at least get some nice sweaters.

The Treasury believes this program is superior to the original TARP plan in that private investors would be setting a “market price” for the toxic assets instead of the government.  Well, a market price using non-market equity from the government, non-market loans from the government at non-market interest rates.

Think of it as if you and your brother-in-law were going in on a vintage Corvette and your wife makes you put up 94% of the money in cash and bank loans because his credit score is as low as his IQ.

And he gets to negotiate the price you both pay.

Regardless, we shouldn’t lose sight of the objective, and that is not just to remove these toxic assets from bank balance sheets, but to “get banks lending again.”

Unfortunately, one of the biggest impediments to bank lending is the fact that banks no longer feel as comfortable as they once did lending to people who can’t afford to pay them back.  That’s partly because Americans are still drowning in excess levels of debt.  And the housing market and employment picture continue to deteriorate.

Sure, those are problems.  But it’s important that we carefully consider the conclusions reached by distinguished Berkley professor, MIT doctoral recipient, and the current Chair of the White House Council of Economic Advisers, Christina Romer who believes in her considered opinion that our financial institutions should: 

 “Lend like crazy!”

You know what helps us sleep at night?  The knowledge that accomplished, educated professionals such as Ms. Romer are dealing with these complex issues. 

And a large glass of tequila.

Mostly the tequila.

J.

March 24, 2009 at 04:43 PM in Current Affairs | Permalink | Comments (1) | TrackBack

March 23, 2009

The GIVE Act: “Giving Income to Volunteer Employees”

The House last week passed the “GIVE” act, “Generations Invigorating Volunteerism and Education,” which would reauthorize and dramatically expand the original “AmeriCorps.”

Like AmeriCorps, the GIVE act puts a twist on volunteerism by offering monthly pay, health benefits, housing assistance, and vouchers that can be used to pay for college or other educational endeavors.

We’re probably showing our age here again, but getting money for performing a service is what we old-timers used to call “a job.”

However, as we suggested last November when Obama first discussed the measure, these are unlike jobs in two important respects:

1) With a job, you could be doing anything, including things that have not been pre-approved by the Obama administration.

2) There are no restrictions on what you can do with the money you get from a job. With GIVE jobs providing education vouchers, you will be sure to spend at least part of your income the “right” way.  The rest?  They’re probably thinking pork rinds and NASCAR.

Of all the benefits of creating a paid volunteer ObamaCorps, perhaps most important of all is that we’ll be teaching a whole generation of America’s youth that helping out your neighbor, your community, and your country, is something every American should do. 

As long as there is some tangible benefit, of course.  It’s really all in the pay and benefits mix.  (A 401K kicker would really sweeten the deal.)

There are some critics who suggest that this is merely the first step towards putting in place a mandatory service obligation in which all young Americans would be required to participate. This crazy paranoia is based on little more than the bill itself, which states that a commission will be set up to address and analyze:

“Whether a workable, fair, and reasonable mandatory service requirement for all able young people could be developed, and how such a requirement could be implemented in a manner that would strengthen the social fabric of the Nation and overcome civic challenges by bringing together people from diverse economic, ethnic, and educational backgrounds.”

Hey, loons, sorry but you’re going to need more than just the crystal clear language of the bill if you want to convincingly weave nutty conspiracy theories like that.

Besides, the bill (.PDF file) also requires looking into:

“The need for a public service academy, a 4-year institution that offers a federally funded undergraduate education with a focus on training future public sector leaders.”

See?  What could be sinister about a government-created educational institution with a state-approved curriculum training our future glorious leaders in the basic skills of collectivist action? Besides, there are hardly any bad examples of inculcating youth in the glories of service to the state.

Really, what could go wrong?

Of course there are those who point out that institutions not wanting to voluntarily participate in setting up these volunteer programs will volunteer to lose federal funding, while others claim the whole program is “Orwellian” just because it manipulates language by redefining terms for political ends, but that simply proves one thing:

We could have used these programs a few years ago.

Volunteer Dictionary  
J.

March 23, 2009 at 05:58 PM in Current Affairs | Permalink | Comments (1) | TrackBack

March 22, 2009

The Future’s a Fright, Hope My Numbers Don’t Fade

With Apologies to legendary ‘80s band, Timbuk 3, and their timeless masterpiece, “My Future’s So Bright, I Gotta Wear Shades,” we present Barack Obama's:

The Future’s a Fright, Hope My Numbers Don’t Fade

I’m banning nuclear science,
Geithner’s slow as molasses,
I got a crazy Congress, waging war on the classes,
The banking fix is late, unemployment’s heading higher,
Credit’s still tight, the banks need more aid,
The future’s a fright , hope my numbers don’t fade.

I’ve got programs waiting, for some legislation,
A trillion a year – buys a lot of fear,
The banking fix is late, unemployment’s heading higher,
Credit’s still tight, the banks need more aid,
The future’s a fright , hope my numbers don’t fade.

Well I’m heavenly blessed, have a nice helicopter,
I’m a speech-giving techie, with my teleprompter,
The banking fix is late, unemployment’s heading higher,
Credit’s still tight, the banks need more aid,
The future’s a fright , hope my numbers don’t fade.

Hope my numbers don’t fade.
Hope my numbers don’t fade.

In honor of the original:

J.

March 22, 2009 at 03:46 PM in Current Affairs | Permalink | Comments (0) | TrackBack

March 20, 2009

Money For Nothing, Checks For Free…

The Federal Reserve has at its disposal a number of complex policy tools to deal with economic slowdowns and recessions.  It can lower its discount rate, providing incentives for banks to borrow money from the “Discount Window.”  It can purchase government and agency securities in the open market and it can use its Term Asset Loan Facility (TALF) to loan money against assorted private debt obligations.

To help readers navigate this complicated maze of monetary tools, we’ve broken them down into three broad categories:

1) Print money.
2) Print money.
3) Print money.

No doubt, you have questions regarding these mysterious and arcane financing mechanisms, so we’ve created this handy Q&A:

Q: When the Federal Reserve provides loans or purchases debt obligations, where does it get the money to pay for these market interventions?
A: It uses its statutory authority to complete the transactions through the origination of incremental additions in reserve currencies.

Q:
Is that anything like printing money?
A: Yes.

Q:
How much is it like printing money?
A: Pretty much exactly.

Q:
What are all these dollars the Fed is printing backed by?
A: The full faith and credit of the United States Federal Reserve.

Q:
All the Federal Reserve has is the ability to print money.
A: Yes.

Q:
So the dollars the Federal Reserve prints are backed by dollars the Federal Reserve prints.
A: Pretty cool, huh?

Q:
Have we ever considered moving back to a system where the currency is backed by something of intrinsic value, say…
A: Don’t say it!

Q:
…gold?
A: You said it.  Kook.  Nutcase. 

Q:
What?  No, I’m just wondering if, in light of recent events, we might not at least engage in a constructive discussion of some kind regarding a currency backed by something tangible.
A: That kind of monetary policy is like the Special Olympics or something.

Q:
That’s kind of inappropriate.
A: It’s okay, the President said it.  It’s like with Clinton and Lewinsky, we used to think that it was clearly a sexual act if you…

Q:
Okay, okay, I get the picture. So, it’s crazy to talk about the “gold standard.”
A: Yes.

Q: But a star-chamber like system where a handful of individuals have unfettered authority to rapidly increase the entire nation's money supply as they see fit is what?
A: Prudent.

Q:
Aren’t you worried about inflation?
A: Infla-what now?

Q:
Inflation.
A: No, it’s deflation we’re worried about.

Q:
What’s wrong with deflation?
A: It’s terrible!  Horrible!  It hides underneath your bed at night and feasts on the entrails of those who question Fed policies.

Q: What? Deflation isn’t some monster...
A: It caused the Great Depression!

Q:
It did not.  It was merely a result of…
A: Kook!  Nut!  Loon!

Q:
That’s it, we’re going to go buy some of our own gold…
A: We have an answer for that too.

Q:
What?
A: Nothing.

J.

March 20, 2009 at 02:57 PM in Current Affairs | Permalink | Comments (0) | TrackBack