In defense of driving bans

If this is not the perfect metaphor for feminism, then I don’t know what is:

A young woman in Saudi Arabia who defied the ultra-conservative kingdom’s ban on women driving was injured when the car span out of control and plunged into a stream, a newspaper reported on Tuesday.

The unnamed woman in her 20s “stole” her brother’s car on Sunday, picked up a female friend and drove at high speed through a town in the Eastern Province before losing control of the vehicle, Al-Riyadh said. The car hit an electricity pole and plunged into an irrigation channel. Both the driver and her friend were taken to hospital in serious condition, the paper said.

Sometimes I look at an attractive young woman who is determined to change the world and prove that women are truly equal to men in every possible way the eyes of the law, in social access, and in opportunity, and it makes me feel as if I’m standing on the edge of a very high precipice with a beautiful kitten in my hands. She’s a brave little kitty, a courageous bundle of strength and independence, and her claws are sharp indeed. I cannot help but admire her as she bares her cute little fangs and meows her bold defiance of the uncaring world and all its unfairness and inequality.

Then I extend my arms out over the chasm, and I open my hands, and I cry: “Fly, little kitten, fly like the wind!”

Bailout: the blog view

John Hawkins of Right Wing News asks the nominally right-wing blogosphere four questions about the bailout:

1) Is the PRIMARY cause of this crisis…

A) Deregulation, market forces, and Wall Street?: 7% (4)

B) Government interference in the market?: 93% (56)

2) Do you support the bailout?

A) Yes: 29% (18)

B) No: 71% (44)

Interesting, when the nominally conservative commentariat appeared to support the bailout in similar percentages. No wonder conservatives are increasingly moving towards the blogs and away from their media-appointed champions who increasingly look like the PR specialists for the other side. I understand that the Democrats are largely to blame for the housing problem, but I really do not see how the economic situation can help McCain in any way.

After all, as that great conservative George Bush has declared, when people are hurting, the government has to act.

Interview with Congressman McCotter

Congressman Thaddeus McCotter is a Michigan Republican who was the first member of the House of Representatives to publicly oppose Treasury Secretary Henry Paulson’s plan to spend $700 billion bailing out bankrupt Wall Street institutions. After the House of Representatives voted against the legislative proposal, the congressman called on President Bush to fire Paulson.

Congratulations on successfully shooting down the bill.

Well, we don’t view it as a victory here, it’s just the responsibility to get the job done for the American people.

What were your main reasons for opposing the Paulson plan, even in the revised form that you voted on today?

It’s not about me. I suppose this is a representative government. From the MINUTE the Paulson plan was introduced, the American people said no. And then as this administration foisted that proposal upon this Congress, the American people said no. And then as Congress, despite warnings from people like me, set an artificial deadline of midnight Sunday, the American people said no. And when the artificial deadline was met with a bad proposal, which was the Paulson proposal, the American people still said no. The only thing we can take out of this is that fortunately the Paulson proposal did not pass.

Now, Congress is going to act. It is going to act in a responsible and timely fashion on a piece of legislation that the American people know is fair to their interests and will help with this economic situation. In the final analysis, the Paulson plan fundamentally failed in that it wanted the American taxpayer to buy noxious, toxic assets out of the marketplace. You have to remove both the plan and Mr. Paulson from the process. I’ve asked the President to demand Mr. Paulson’s resignation and deputize someone else so that the Congress and the White House can get on with a plan the American people will accept.

Speaking of what the American people will accept, I took a poll of my readers and the Right Wing News took a poll of its readers. Only 15 percent of the Right Wing News readers supported the bailout, and only about one percent of my readers did. Are the administration and the other members of Congress who supported the bill unaware of the strength of public opposition to the plan or do they just not care?

I’ll let them speak for themselves, but I think that what you’re finding is the same thing other members of Congress are finding. First, there’s an argument that the American people don’t seem to understand what is happening if this bill failed. I think the opposite is true. The American people, from the MINUTE this Paulson bailout was announced, understood what it meant and they decided they did not like it. What happened was an arrogant administration forced it upon Congress and finally, finally, thanks to the U.S. House, the people’s voice was heard and obeyed. Now we can finally get down to the serious business of doing what is in the best interests of the American people.

What basic economic theory is operative in Congress right now?

Right now, the only thing that was operative, that was put in front of us, was Paulson’s plan, which was to buy those toxic assets at public expense. There are several other models out there that other nations have used far more often and far more successfully than the flawed model Paulson put in there for the Wall Street bailout. What we want is something that will spur private recapitalization so the money comes in off the sidelines where it’s parked, and also provides an appropriate government backstop that is necessary and just for the American people’s economic prosperity. Those are the two fundamental principles. As you can see, private recapitalization and appropriate government backstop that is just and fair to Americans, is an entirely different path than the one taken by Paulson with his first, only, last resort of a public bailout of Wall Street.

Conventional Keynesian theory, to which I do not subscribe–

Nor do I!

One of my readers went to high school with you. He told me that you’re Austrian-aware.

Roepke, I’m more of a Roepke guy. I don’t go as far as Von Mises. A humane economy, not an insane economy.

Fair enough. But the basic Keynesian model states that savings equals investment and there hasn’t been much savings in the American economy because interest rates have been so low for so long. Where is this private capitalization supposed to come from with artificially suppressed interest rates that in real terms may actually be negative?

I would actually go one step further because I think you’re getting very close to the same position I’m at. Savings are deferred consumption channeled into investment. What happens under the despicable Keynesian model, the disastrous Keynesian model, is this – savings start to reduce. And what the government does then is to pump expanded credit into the system. It creates investment inflation. This is exactly where we are and it’s called a bubble. And the market has endeavored, as it always does, to correct that investment inflation, so Mr. Paulson and Mr. Bernanke wanted the taxpayers to inject $700 billion to keep the bubble inflated! And it’s not going to work!

What you have to do is get the private money to come in and look at the assets, start to clear that out through proper legislation to incentivize it, and then get an appropriate government backstop. Now, in the long term picture, it is all about reincentivizing American savings to increase that pool of capital here. It is also about attracting American capital that is parked offshore back for repatriation; the last time we did it there was over $300 billion that came back into the American economy. Benedict Arnold, as the Democrats have put it, Benedict Arnold cleaning up Wall Street. And then what you can also do is incentivize PRIVATE foreign investment to come back into the United States through appropriate legislation.

As opposed to the sovereign funds they’re currently relying on.

Right, the sovereign wealth funds I oppose. They’re government-run, and when the government of any nation, especially nations that are antithetical to the interests of the United States such as Communist China, when they come in and buy a private asset, it’s been nationalized. It’s been socialized! And when socialism is imported into the United States economy, the free market gets smaller and everyone’s liberty and prosperity is imperiled.

The dollar has lost 95.2 percent of its value to inflation since 1913, even by the official figures. From 1813 to 1907, its value actually increased 52 percent. Given the demonstrable failure of the Federal Reserve to either control inflation or maintain a stable financial system, why is there still such support for it in Congress?

I think that the argument that is made is probably because, as Roepke pointed out, people seem to think that inflationary periods are quite pleasurable until they realize that there’s a deflationary period to match it when the market corrects itself. Plus, the more government under the Keynes model has a role within people’s economic lives, the more important government is, the more powerful it is. In short, you’re asking people to refrain from using their publicly entrusted subservient positions, as members of Congress or members of the government, from interfering in a marketplace to make themselves popular for a short period of time.

Now, I’ve got time for one more. Give me your best shot.

There’s a lot of suspicion that Congress is going to go to the Brussels model and make you vote until you get it right. How are the House Republicans going to deal with that?

It is up to the American people. The American people have spoken clearly, and it is incumbent first and foremost upon this administration to admit that the American people have rejected the Paulson bailout model for our economic rescue. It is that simple! If the administration continues to push this forward, even if that bill passes against the wishes of the American People, nothing is going to be accomplished. Even by its proponents it is being sold as a short-term STABILIZATION measure that doesn’t address the root problems that we have.

The American people will not stand to be dictated to by an administration or by a Congress that is deaf to its expressed wishes. That’s why we are a free people and will remain so.

A tribute to Bane

Zeno informs us that the family Bane has come up with a fitting tribute to the old Reaper’s Hairball:

The other night we gathered up about five guns and shot them off in honor of Bane. We took the empty shells from the ground and mailed them to someone in the family that loads ammo. When we get a small percentage of Bane’s ashes we are going to have them loaded into ammo and close family members will be welcome to keep a Bane Bullet. He would have loved that.

Banepowder bullets. What a brilliant idea!

Speaking on our behalf

A press release from Congressman Thaddeus McCotter’s office prior to the vote:

WASHINGTON, D.C. – Republican House Policy Chairman, Representative Thaddeus McCotter (R-MI), the first Republican member of Congress to publicly oppose Wall Street’s trillion dollar bailout, remains adamantly opposed to the legislation despite the Paulson bailout’s cosmetic changes:

“We are faced with the first financial panic of the global economy. Thus, the Congressional action taken today will set a precedent affecting the prosperity of Americans for decades to come. The proposed $700 billion dollar Wall Street bailout bill is not a Republican solution; it is not a Democratic solution; it is not an
American solution. The proposed $700 billion dollar Wall Street Bailout is a socialist solution – one that, by threatening hardworking Americans’ prosperity, unconscionably ransoms hardworking Americans’ money and reduces their liberty. As such, it is a generational threat to Americans’ liberty and prosperity.

Congress cannot re-inflate the bubble to save the American economy.”

I just thought the dude deserved a victory lap, since he certainly kicked some ass on behalf of America’s economic liberty today. And based on that last bit about what Congress can’t do, (as opposed to what it shouldn’t do), I’m guessing he’s more Austrian than Keynesian.

UPDATE – The congressman sends another email:

It is time for the President of the United States to:

Calm the Congressional and global investor panic his administration has exacerbated.

Demand the resignation of Treasury Secretary Paulson, who no longer serves a constructive role in the enactment of the legislation necessary to end this period financial difficulty and uncertainty.

Deputize and dispatch a new representative to the Congressional negotiations, such as former Treasury Secretary James A. Baker, III, who has credibility with both markets, Congress, markets and, most importantly the American public.

Rule out pushing a financial recapitalization model based upon taxpayers purchasing ‘toxic assets’ from financial institutions, which the American public rightful believes unjust.

I’m not keen on that Baker notion, but the rest of it is eminently reasonable, even if I would have preferred to see him call for something rather more TV-friendly than mere resignation for Mr. Paulson. The key thing is to understand that Congress should not do ANYTHING, because anything it does will make the situation worse. Well, anything it’s remotely likely to do, anyway. The reason Wall Street’s demise won’t harm the economy anywhere nearly as much as everyone seems to think is quite simple. Wall Street doesn’t fund any actual productive investment anyhow!

Entrepeneurship and freedom create wealth. Borrowing money doesn’t, they’re like steroids, enabling unnaturally fast development that will kill the user more often than not.

The text – of the late and unlamented deal

Here’s the text of the deal to which everyone, but a number of House Republicans, apparently, agreed last night.

UPDATE – notes on a Treasury call to most favored investors:

1) If even the Treasury is saying tranching is a formality, then it really is nothing. Not sure why Dems fought so hard for a fig leaf.

2) Waiting a couple of weeks because no one has any idea when or where the next bomb will blow up. In other words, all their doomsday scenarios about Black Monday were B.S. They screamed the check had to be written by Monday, but now they’re saying they actually have a few weeks before they need to cash it. Plus, this will allow them to “seek guidance” from GS, JPM, and other selfless public servants about where the money should be funneled.

3. The tap dancing is because they don’t want it to get out that they’ll be giving a sweetheart deal. The public won’t be following each individual transaction to see exactly what price is being paid. So ridiculously overpriced asset sales can be hidden in the details, and by the time some reporter (or blogger 🙂 combs through and analyzes the transactions, the deed will have been done. But if Paulson makes a statement that assets will be bought at par before the bailout’s even begun, that will be reported and might kill the deal.

4. In other words, we need to sweeten the pot to encourage banks to come “voluntarily”. Pardon my ignorance, but why the hell should we be begging banks to borrow from us? I thought a bailout should be the absolute last option for a bank. I.e., it should be so unpalatable, so unprofitable for a bank and its executives that they exhaust every private means of survival before coming for their public “reaming”. I wonder if foreclosed homeowners would rate their foreclosure process as “user friendly”.

5. Of course the exec comp provisions are a joke. Who do you think is going to be hiring all those banking cmte staffers and newly retired congresspeople next year during the inevitable post-election turnover? Do you really think they’re going to vote to limit their salaries? Remember that for lots of people on the Hill (including elected reps), govt work is merely time you spend accumulating credentials in preparation for your real life’s work in the vastly richer private world.

UPDATE II – 226 against to 207 for. It’s dead for now. But how long will it take Wall Street to convince Washington to pull a Brussels and start the vote-until-you-get-it-right process? My guess is that since stomping their feet didn’t work, now they’ll try holding their breath, in other words, doing their best to bomb the markets before swooping in with another emergency plan.

The question is, how much leeway do they have?

UPDATE III – There’s our answer. It’s the Brussels option. Congressman Boehner just declared “We need to renew our efforts.” Question: can America get a restraining order on these jokers? No one is going to come around simply because Wall Street’s representation has gone all stalkery on us.

We did it! The suckers bit!


The bailout crew looks pretty pleased. This cannot bode well. Pretty soon they’re going to start just screwing with everyone’s minds just for the hell of it.

Frank: “Unleth you wear your underwear on your head AND give the firtht plumber you thee a hummer, the economy will melt next Thurthday! Oooh, thscaweeee! Tho, put your damn underwear on your damn headth, idioth, do it now!”

Pelosi: “HAHAHAHAHAHAAHA!”

Paulson: (to himself) “The fat little flamer made a funny. Ah ha ha. But how does one profit from improperly positioned underwear and felahteo? No wonder his rent boy ring went under. Damned amateur couldn’t even sell sex while I brought in 250 big ones in cash just by saying ‘boo’. God, what a freak show. I cannot get out of here soon enough.”

Reid: “This should kill McCain dead. And when he dies, I want to wrap his waxy, white, paper-thin skin around my head like a turban. And I shall wear Sarah Palin’s underwear – no, that sexy red Alaskan swimsuit!”

Pelosi: “HAHAHAHAHAHAAHA!”

Dodd: “Don’t forget to tape your nipples, Harry. Oh sweet Sir Alan Greenspan, I do so love sodomizing Republicans! In a perfect world we would all be wearing giant lubricated condoms over our whole bodies right now!”

Paulson: (into cell phone) “Janis, call Lloyd over at Goldman and tell that damned miser the bidding starts at 100 mil per and a five percent share. Gross, not net. Offer on the desk by Friday; my work here is done.

Pelosi: “HAHAHAHAHAHAAHA!”