Friday, December 12, 2008

Why Bother?

Last night the Senate failed to pass the bill to bailout the U.S. Automakers. This morning, the Treasury piped in and said: ""Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,'' (Treasury spokeswoman Brookly McLaughlin).
My question is this: why did we bother to waste Congress's time debating this issue if the Treasury was going to step in and give them the money anyway? Just to have the illusion that the American people have any say in anything anymore?
"The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry," White House press secretary Dana Perino said. Really Dana? Why didn't you just slam the table with your Thor's Hammer Gavel last week then - and America could have avoided wasting billions of dollars covering the up to the minute developments in the bailout debates, which, it turns out, may not matter anyway!
This reminds me of a kid who quickly learns that if he asks dad for something, and the answer is no, he should just go ask mom. If that fails, there's always grandma and grandpa. SOMEONE will say yes eventually.
You may notice that my argument is independent of the fact that I believe we should NOT bailout the automakers: the point is, we have a process, we followed the process, and it seems the whole thing was a sham - our elected officials have spoken, but someone somewhere doesn't like what they said. What a joke. I mean, we could at least do what we did with the TARP hearings: after the auto bailout was rejected, let's wait until Congress panics when the stock market tanks, and makes the mistake of confusing the stock market with the good of the American people, changes their mind, and passes new legislation. That process sucks, but it's better than Congress's will being ignored or overruled.
And in other news, just in case you missed the Bernie Madoff story: it turns out his entire asset management business was a ponzi scheme (and possibly the biggest ponzi scheme in history!). The great thing, though, is that as long as he turned out positive returns, no one cared! (Sounds like the same symptoms of our massive credit bubble doesn't it? Take on massive risk, but no one cares as long as the returns are positive!) As Clusterstock points out, Barron's actually questioned his returns back in 2001, as he seemed to have made the same mistake as the guys who cheated at online poker: he never lost money! Another brick in the wall.
Still building my bunker,

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