Free Markets, Free People

Policy

Conference on Health Care Reform

Cato Institute is hosting a conference on health care reform today that will be webcast live. It will feature the following speakers:

* Rep. Paul Ryan (R-WI)
* Rep. Michael C. Burgess, M.D. (R-TX)
* Rep. Jason Altmire (D-PA)
* Karen Davenport, Director of Health Policy, Center for American Progress
* Douglas Holtz-Eakin, Former Director, Congressional Budget Office, and Director of Domestic and Economic Policy for the McCain presidential campaign
* Tom G. Donlan, Barron’s
* Karen Tumulty, Time Magazine
* Susan Dentzer, Health Affairs
* John Reichard, Congressional Quarterly

This represents a wide range of views and promises to be much more interesting and informative than the White House/ABC News infomercial scheduled for next week. so if you’re interested in this topic at all, take some time to check it out.

Obama Media

While it comes at no real surprise given how they behaved during the presidential campaign, the MSM has finally decided to go all in with its support for the President. Next Wednesday night, June 24, ABC News will host a program about health care reform from inside the White House, but only one side will be presented — i.e. Obama’s. The Chief of Staff for the RNC is not happy about this decision and sent the following letter to David Westin, the President of ABC News:

Dear Mr. Westin:

As the national debate on health care reform intensifies, I am deeply concerned and disappointed with ABC’s astonishing decision to exclude opposing voices on this critical issue on June 24, 2009. Next Wednesday, ABC News will air a primetime health care reform “town hall” at the White House with President Barack Obama. In addition, according to an ABC News report, GOOD MORNING AMERICA, WORLD NEWS, NIGHTLINE and ABC’s web news “will all feature special programming on the president’s health care agenda.” This does not include the promotion, over the next 9 days, the president’s health care agenda will receive on ABC News programming.

Today, the Republican National Committee requested an opportunity to add our Party’s views to those of the President’s to ensure that all sides of the health care reform debate are presented. Our request was rejected. I believe that the President should have the ability to speak directly to the America people. However, I find it outrageous that ABC would prohibit our Party’s opposing thoughts and ideas from this national debate, which affects millions of ABC viewers.

In the absence of opposition, I am concerned this event will become a glorified infomercial to promote the Democrat agenda. If that is the case, this primetime infomercial should be paid for out of the DNC coffers. President Obama does not hold a monopoly on health care reform ideas or on free airtime. The President has stated time and time again that he wants a bipartisan debate. Therefore, the Republican Party should be included in this primetime event, or the DNC should pay for your airtime.

Respectfully,
Ken McKay
Republican National Committee
Chief of Staff

This comes on the heels of a Politico report about how Obama has been “wooing” the New York Times (as if it needed wooing), and further evidences a disturbing level of acquiescence to the White House. It’s one thing to have a broadcast from inside the White House, although it does strike an appearance of impropriety, but its another thing altogether to so blatantly snub an opposing views when the production is supposed to be one of news reporting. Presenting the view of those in power without question or examination, and refusing to allow any other voice, is pretty much the textbook definition of propaganda.

Since there is sure to be an uproar over this in the blogosphere, however, I’m wondering whether ABC News will back down and either allow some token opposition voice, bring on a known opponent of the President’s plan to raise some issues, or allow some questions of the President from actual reporters (Jake Tapper does still work for ABC News, doesn’t he?). Either way, its awfully pathetic that the MSM can’t seem to figure out how to get it right the first place. They are so blinded by their fascination with all things Obama, apparently, that any semblance of actual news reporting has gone out the window, and is being replaced with unabashed cheerleading for The One.

UPDATE: Oops! I didn’t realize that Bruce was writing on the same topic until after I posted. See his take below as well.

Krugman: The “Nipponisation” of the World

After a lot of partisan “happy talk” about how the Obama administration is handling the economic crisis here, Paul Krugman goes on record saying the world is doomed to suffer Japan’s lost economic decade on a global scale.

The thing about Japan, as with all of these cases, is how much people claim to know what happened, without having any evidence. What we do know is that recessions normally end everywhere because the monetary authority cuts interest rates a lot, and that gets things moving. And what we know in Japan was that eventually they cut their interest rates to zero and that wasn’t enough. And, so far, although we made the cuts faster than they did and cut them all the way to zero, it isn’t enough. We’ve hit that lower bound the same as they did. Now, everything after that is more or less speculation.

For example, were the problems with the Japanese banks the core problem? There are some stories about credit rationing, but they are not overwhelming. Certainly, when we look at the Japanese recovery, there was not a great surge of business investment. There was primarily a surge of exports. But was fixing the banks central to export growth?

In their case, the problems had a lot to do with demography. That made them a natural capital exporter, from older savers, and also made it harder for them to have enough demand. They also had one hell of a bubble in the 1980s and the wreckage left behind by that bubble – in their case a highly leveraged corporate sector – was and is a drag on the economy.

The size of the shock to our systems is going to be much bigger than what happened to Japan in the 1990s. They never had a freefall in their economy – a period when GDP declined by 3%, 4%. It is by no means clear that the underlying differences in the structure of the situation are significant. What we do know is that the zero bound is real. We know that there are situations in which ordinary monetary policy loses all traction. And we know that we’re in one now.

Shorter Krugman, “we’re in new territory in terms of the size of the problem, but it is all eerily similar to what happened to Japan”. Unfortunately our reaction has been eerily similar to what Japan did as well.

Krugman’s bottom line:

WH: So, one way to think about it is that self-reinforcing financial crises rooted in overstretched, overborrowed companies and governments in less developed countries – like those in Argentina and Indonesia, which were amazingly destructive in the 1990s and 2000s, but localised – are now playing out in the developed world?

PK: There are really two stories. One is the Japan-type story where you run out of room to cut interest rates. And the other is the Indonesia- and Argentina-type story where everything falls apart because of balance-sheet problems.

WH: So in a nutshell your story is …

PK: The “Nipponisation” of the world economy with a bunch of “Argentinafications” playing a role in the acute crisis. But even after those are over, we have the Nipponisation of the world economy. And that’s really something.

And of course, implicit in the “Nipponisation” of the world economy is the “Nipponisation” of the US economy – something we’ve been talking about for some time. Now, add “cap and trade” and “health care reform” into the mix.

What will we be wishing we were suffering when that all kicks in, should it pass? Nipponisation, of course. As bad as lost decade or two might be, it would be heaven compared to the economic carnage those big tax and spend programs will inflict on a very weak economy here in the US. And that, of course, will ensure the “Nipponisation” of the world economy.

~McQ

Health Care: “Special Interest Democracy”

It may be hard to believe [/snark], but it appears when Democrats speak of “fairness” they define it in their own special interest kind of way.

Take the talk about taxing your private health care benefits (something adamantly opposed by Obama during the campaign).

Originally it was going to be everyone. But other Democrats complained mightily to Senate Democrats who were considering such a tax to pay for the conservatively estimated 1.5 trillion necessary to pay for “health care reform” (PAYGO? HA!). So they modified it a bit – tax the “rich” – those who had the best of coverage. Always a popular populist fallback, Sen. Dems were sure that would work.

Alas it was soon discovered that a huge number of those holding “Cadillac” health care policies were unions. Yes, the special interest group in the pocket of the Dems (and vice versa) would be heavily hit by such a tax. As you might imagine, they were not happy.

Solution – drop this bad idea?

Of course not. Instead exempt the unions, you silly person:

Mr. Baucus officially floated his plans for a tax this week, only with a surprising twist: His levy will not apply to union plans, at least for the duration of existing contracts. In other words, Mr. Baucus intends to tax the health-care benefits only of those who didn’t spend a fortune electing Democrats to office. Sen. Ted Kennedy, who is circulating his own health-care reform, has also included provisions that will exempt unions from certain provisions.

The union carve-out is designed to allay the fears of many Democrats who remain outright hostile to a tax on health-care benefits, whether out of principle, political fear or union solidarity.

This is not your grandfather’s America. Pay czars who arbitrarily set arbitrary pay limits based on what they “think” (according to presidential spokesperson Robert Gibbs) is “fair”, a government appointed CEO for an auto company who admits he knows nothing about cars and the government hijacking of health care.

If you’re not concerned, you’re not paying attention.

~McQ

Miranda and War

An interesting discussion broke out in the comment section of the Miranda post, which I’m hoping will continue. The primary issue (and I’m simplifying here) centers around just how detainees caught on a battlefield should be handled if they don’t fit the established parameters of soldiers under the Geneva Conventions. Although there appears to be agreement that reading detainees Miranda rights is a step (or three) too far, there is also wide agreement that we should be skeptical about allowing our government so much latitude as to hold anyone indefinitely. I think closing the gap on those parameters is the challenge to be met, but I don’t think it is possible to do so without understanding how war differs from law enforcement.

Clausewitz defined war as “continuation of policy with other means.” The crux of his definition is that “war” is simply a tactic used to further political goals. War is not waged as end in itself, but as a means towards other ends which, for whatever reason, could not be accomplished through non-violent tactics. There are always exceptions, of course, but certainly a rational state will not expend blood and treasure when the same goals can be accomplished without. Even an irrational state, with irrational goals, will not waste such resources if it understands that it does not have to.

The other tools in the box for continuing policy include diplomacy and capitulation. Once those are deemed exhausted or unacceptable (as the case may be) then the tool of war is likely to appear. In other words, if agreement cannot be reached between erstwhile enemies, and surrender by one side or the other is not acceptable, then actual battle will be necessary to decide whose policy will be continued. At that point all manner of understanding between the parties is dead and only victory or a credible threat thereof will allow the discarded tools to once again be used in the construction of policy.

In the absence of war, there is general agreement as to how competing parties will conduct themselves in the pursuit of their policies. Citizens may vote, senators may argue, special interests may agitate, and whole nations may barter. The agreements may deal with how citizens deal with one another, how governments deal with their citizens, or how violations of the agreements are handled (i.e. law enforcement). In the modern world those general agreements are reduced to treaties, constitutions, rules, regulations and the like, all of which may be considered law. The policies themselves may also be enacted into law, but without some understanding as to the mechanisms for peacefully deciding which policy will be followed, then war is the only tool available. A rule of law, which is only useful where there is broad agreement on it, obviates the need to use war to advance policy. All of the foregoing are the hallmarks of a civil society that depends on pursuing policies through peaceful tactics. To turn Clauswitz’s definition around, law is the continuation of war by other means.

To be sure, transgressors of law will be dealt with at times in violent ways, but there is at least a tacit agreement to the law’s authority to do so where the violator is operating from within the society and generally partaking of its benefits. If enough transgressors get together then the agreements have broken down, and civil war or revolution may occur. Therefore, war can be understood as the tactic that is used when the law has ceased to be of use. More simply, war is the absence of law.

Given the above, which is nothing more than a condensed version of my personal views on the subject, it is difficult for me to understand how legal concepts can be introduced into war. Opposing factions may agree with one another to fight under particular rules of engagement, or to treat enemy prisoners a certain way, but when those rules are broken there is no legitimate authority to enforce them. The Geneva Conventions represent a more elaborate attempt to impose limits on warfare, but even those were never intended to apply to non-signatories except in very limited circumstances (pre-Hamdan anyway). More importantly, it seems obviously ludicrous to apply laws outside such limited agreement to any of the parties involved in battle, because there would be no battle if such laws were being adhered to in the first place.

So while any number of parties may agree amongst themselves to fight under self-imposed rules, that does not give any of them authority to impose those rules on others. Furthermore, except where explicitly agreed to otherwise, such rules would not govern war between a party to such an agreement and a non-party. To look at it another way, if Mike Tyson and Evander Holyfield agree to fight under certain sanctioned rules, that does not mean that either fighter must adhere to the same rules if attacked by a third party on the way home from the match.

Accordingly, in a world of asymmetrical warfare, the basic principle that “war is the absence of law” seems to apply. In this context, the very idea of approaching war with terrorists in foreign countries under a rubric of law intended to govern domestic life appears absurdly out of place. Treating detainees captured on the battlefield to the luxury of legal niceties intended to protect the very citizens those terrorists seek to harm defies all logic. And pretending that reading any of them Miranda rights will do anything more than hamper our ability to defeat these cretins is an exercise in serious delusion. In short, law is a manifestation of the agreements underlying a peaceful community, and war is the means of protecting those agreements from those who seek to subvert them.

When considering just where the line should be drawn then, between reading enemies their “rights” and allowing the government to detain them indefinitely, I think it’s useful to understand that we are not really talking about a “rule of law.” Instead, we are talking about how best to utilize the tactic of war in furthering our policy of not allowing crazed radicals to murder our citizens. While I find great merit in placing the government (i.e. our instrument of war) on a firm leash, I don’t think it is at all useful to conflate the means by which we protect ourselves from an overbearing government with the means by which the government protects us from enemies bent on our destruction.

Embracing Paygo

Republicans and some allies are criticizing President Obama’s proposal for “pay as you go” rules that only cover new and expanded entitlement spending. They rightly point out that legislators can get around these new rules with budgetary tricks like relabeling spending so that “PAYGO” rules don’t apply.

But some on the Right have also warned that paygo will just lead Democrats to pass higher taxes. I’m not convinced that that’s a bad thing.

Don’t get me wrong: I don’t like taxes. But deficit spending is taxation — deferred taxation, with interest. If the government is going to spend a bunch of our wealth on things other than emergencies, enlightened fiscal conservatives should want the American people to see the price tag, the sooner the better.

Otherwise we’re going to continue this business of borrowing from our children to pay for our reckless spending today – that’s what a lot of those tea partiers were protesting against, wasn’t it?

So fiscal conservatives should propose even more comprehensive and stringent paygo legislation than the Democrats have. Force the Democrats to put it all on the table – lock in tax hikes or spending cuts, now.

We’re going to have to do pay the piper at some point, so how does it help to wait until a real fiscal emergency is upon us?

The longer we wait to pay for it through direct taxation, the more time we give the spenders to come up with clever ways to conceal the cost – whether through inflation, or carefully targeted taxes designed to create as little political backlash as possible. Paygo creates forced errors.

If the Democrats decide to cover the gap with tax increases, that’s an issue for 2010 and beyond. Every new big spending plan, like the Obama health care plan, comes with a surefire tax increase in the near future. And as Californians recently showed the country, even Lefty voters don’t like the prospect of actually paying for all those neat programs for which they voted.

Sure, it’s self-serving for Republicans who engaged in no small amount of deficit spending themselves to suddenly find religion on the need for a balanced budget.

But there are good reasons to suspect that this level of deficit spending (and the necessary money-printing that has followed) is going to hit us in all kinds of unpleasant ways. If we don’t commit now to eventually paying off these debts, the problems will get even worse.

So let’s do something about it – or turn the heat up on the Democrats until they do something about it. Let’s give them all the paygo and fiscal discipline they can handle, and then some.

Sometimes A Picture …

Is definitely worth a thousand words.

Or a chart.

Arthur Laffer is not amused:

Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That’s more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers’ expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.

With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs — such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid — are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.

But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.

And what have those “panic-driven monetary policies” brought us? Well, first the picture:ed-aj638a_laffe_ns_20090609175213

The chart is certainly no laffer.

Remember, we’re being told by “experts” (*cough* Krugman *cough*) that we’ll be able to handle this with no problem, really, if we just manage it properly. A tweak here, a tweak there and bingo – no inflation.

Hmmm … let’s get a little context here, shall we?

The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 (see chart nearby). It is so far outside the realm of our prior experiential base that historical comparisons are rendered difficult if not meaningless. The currency-in-circulation component of the monetary base — which prior to the expansion had comprised 95% of the monetary base — has risen by a little less than 10%, while bank reserves have increased almost 20-fold. Now the currency-in-circulation component of the monetary base is a smidgen less than 50% of the monetary base.

So that means that what? Well Laffer goes into a good explanation of bank reserves and how they function, etc. etc. – bottom line, banks are going to be loaning a bunch of money, thereby injecting liquidity into the marketplace.

But.

With the present size of the monetary base, and …

With an increased trust in the overall banking system, the panic demand for money has begun to and should continue to recede. The dramatic drop in output and employment in the U.S. economy will also reduce the demand for money. Reduced demand for money combined with rapid growth in money is a surefire recipe for inflation and higher interest rates. The higher interest rates themselves will also further reduce the demand for money, thereby exacerbating inflationary pressures. It’s a catch-22.

And what does that mean could happen? Well again, we’re in uncharted territory, but the last time we had anything even similar, eh, not so good:

It’s difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed’s actions because, frankly, we haven’t ever seen anything like this in the U.S. To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn’t a pretty picture.

Yeah. I remember it well. And here we are again – on steriods. So now what?

Per Laffer, the Fed must contract the money supply back to where it was plus a little increase for economic expansion. And if it can’t do that, it should increase the reserve requirement on banks to soak up the excess.

But Laffer doubts that can or will be done:

Alas, I doubt very much that the Fed will do what is necessary to guard against future inflation and higher interest rates. If the Fed were to reduce the monetary base by $1 trillion, it would need to sell a net $1 trillion in bonds. This would put the Fed in direct competition with Treasury’s planned issuance of about $2 trillion worth of bonds over the coming 12 months. Failed auctions would become the norm and bond prices would tumble, reflecting a massive oversupply of government bonds.

In addition, a rapid contraction of the monetary base as I propose would cause a contraction in bank lending, or at best limited expansion. This is exactly what happened in 2000 and 2001 when the Fed contracted the monetary base the last time. The economy quickly dipped into recession. While the short-term pain of a deepened recession is quite sharp, the long-term consequences of double-digit inflation are devastating. For Fed Chairman Ben Bernanke it’s a Hobson’s choice. For me the issue is how to protect assets for my grandchildren.

Nice.

Yes friends – we’re in the best of hands. I’m just wondering how the present administration is going to attempt the blame shifting when the inevitable happens.

~McQ

Health Care – “The Public Plan”

Ezra Klein discusses what has commonly become known as the “public plan” in the emerging “health care reform” legislation. Put simply it is “public insurance” which is supposed to compete with the private insurance industry and, as Paul Krugman claims, keep them “honest”.

Klein lays out the various flavors being floated out there concerning this option:

• The “Trigger” Plan: Olympia Snowe is pushing this compromise, as are some conservative Democrats. The basic idea is that the public plan would act as an invisible threat: It would be “triggered” into existence if the private insurance market was unable to offer, say, enough options in a particular region, or enough cost control. In addition, the public plan would only come into existence in this or that region, or this or that state. It would be effectively useless as an insurer. It could potentially have some competitive effect in that private insurers would still work to avoid its existence. Some have argued, however, that the conditions being mentioned in the “trigger” proposals have already been met.

• The Weak Public Plan: This is what people are talking about when they refer to a “level-playing field.” This incarnation of the public plan — first proposed by Len Nichols at the New America Foundation and later echoed by Peter Harbage and Karen Davenport at the Center for American Progress — would have no special advantages over private insurers. It couldn’t use the low rates that Medicare sets or access taxpayer subsidies. It couldn’t force its way into networks. It would simply be another insurer, albeit with different incentives than traditional insurers.

• The Strong Public Plan: This would be like Medicare for the rest of us. It could throw the federal government’s weight around. It could negotiate deep discounts with providers. It could muscle its way into networks. Outside groups like the Commonwealth Fund estimate that it would save the average consumer 20 percent to 30 percent. That would give it a massive competitive advantage over private insurers, and would probably result in tens of millions of Americans dropping their current coverage and entering the public plan to save money. A variant of this was in the draft of Ted Kennedy’s bill that was leaked last week.

While Blue Dog Democrats have come out in favor of the “trigger” option, liberals such as Klein and Krugman prefer the “Strong Public Plan” for the reasons stated (massive dropping of private insurance for “public” (i.e. government) insurance). And there’s a reason they both prefer that – they see it as a backdoor way to move health insurance to a single payer system.

And that is a distinct possibility with both the “strong public plan”. In fact it is a design feature. The “competition” touted would most likely be in name only as Greg Mankiw explains (quoting Krugman to set up his explanation):

What’s still not settled, however, is whether regulation will be supplemented by competition, in the form of a public plan that Americans can buy into as an alternative to private insurance.Now nobody is proposing that Americans be forced to get their insurance from the government. The “public option,” if it materializes, will be just that — an option Americans can choose. And the reason for providing this option was clearly laid out in Mr. Obama’s letter: It will give Americans “a better range of choices, make the health care market more competitive, and keep the insurance companies honest.”

It seems to me that this passage, like most discussion of the issue, leaves out the answer to the key question: Would the public plan have access to taxpayer funds unavailable to private plans?

If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter.

If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what’s the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company. The fundamental viability of the enterprise does not depend on whether the employees are called “nonprofit administrators” or “civil servants.”

The bottom line: If the goal is honest competition in the provision of health insurance, the public option cannot do much good but can potentially do much harm.

That is a critical point in this debate – there isn’t an insurer out there that has as deep pockets as the US Treasury. If there is public money backing the public option, then the talk of “competition” is a sham. It is being used to placate and fool those who oppose a government takeover of insurance, the result which would surely happen if what Mankiw’s concerns are true. And if you follow the reasoning process that Mankiw has laid out above, it should be pretty darn obvious what the intent of this “public plan” really is, all the happy talk Klein and Krugman throw out there notwithstanding.

Last, but not least, while the “strong public plan” is an obvious short-cut to single-payer government run health care, the other two plans simply delay that same eventual outcome for a while. While there are certainly reforms that could be made in the insurance industry and health care generally, anyone who believes that government can do it a) better and b) more efficiently has simply not been paying attention to the shape government finances are in right now or how large the deficit has grown as it has mismanaged its entitlement empire to this point.

~McQ

Socialism? Why Not Call A Spade A Spade?

One of the things we talked about on the podcast this week is how, in the broadest sense, socialism is a growing phenomenon in our country. As I mentioned, while government may not actually own the means of production, if its regulations are such that they dictate how a company must operate, then government exercises de facto ownership.

What is happening in the financial sector right now serves as a perfect example.

The Obama administration plans to require banks and corporations that have received two rounds of federal bailouts to submit any major executive pay changes for approval by a new federal official who will monitor pay, according to two government officials.

[…]

Others, which are being described as broad principles, would set standards that the government would like the entire financial industry to observe as they compensate their highest-paid executives, though it is not clear how regulators will enforce them.

So regulators will have the final say on compensation. That, of course, is an ownership function. The de facto owner then is who?

Moving on:

In a sign of how eager corporations are to escape government diktats on pay, nine of the nation’s biggest banks are likely to repay bailout money as quickly as by the end of this month. The administration is expected to grant its approval this week.

Goldman Sachs, JPMorgan Chase and a handful of others have worked to rid themselves of their ties to government in order to shed restrictions on pay that they say put them at a competitive disadvantage.

But under the administration’s new plans, even companies that repay the taxpayer money will not escape some form of oversight on their compensation structure.

The set of broad pay principles being drafted by the Treasury Department would authorize regulators to tell a bank to alter its compensation arrangements if they are found to encourage too much risk-taking. It is not clear how the government will define too much risk.

Part two – no matter whether you pay the money back in full with whatever interest is owed, the government retains the right to dictate your compensation structure based in some arbitrary metric of “too much risk”, to be determined only by them.

They will apply to a broad swath of financial companies, even the United States operations of foreign banks, as well as private companies like hedge funds and private equity firms.

“This is the government trying to tell the TARP banks not to worry, because everyone else’s compensation will be monitored too,” said Gustavo Dolfino, president of the WhiteRock Group, a financial recruiter, of the industrywide principles. “We’re in a world of TARP and non-TARP.”

Clear enough? For those that like to quibble about the meaning of socialism and parse words, I’m eager to hear your spin on this. But, in light of the plan above you’d better be damned good at deploying the rhetorical smoke and mirrors if you plan to call this anything but a manifestation of the “s” word.

~McQ

Wow, That Stimulus – Just What Was Needed! More, Please!

Another indicator that those in charge haven’t a clue about what they’re doing and anything they say or claim should be taken with a large grain of salt.

Chart: Innocentbystanders.net

Chart: Innocentbystanders.net

So let’s see, given the “logic” which has driven the “solution” thus far, what this calls for is more stimulus money, right?

~McQ