The following was written by Andrew Davis for Conservative HQ. It has been posted here with his permission.
During the 2008 election, Ron Paul became a grassroots icon in his fierce denunciations of Big Government, Big Spending and the federal government’s failure to live by our Constitution.
Unfortunately, his actions don’t match his rhetoric.
According to a Houston Chronicle analysis of the $410 billion dollar spending bill passed by Congress at the end of February, Ron Paul had a role in obtaining 22 earmarks, totaling $96.1 million—making him the pork-leader of Houston’s congressional delegation.
Paul’s office did not respond to comment requests from the Chronicle; however, on Paul’s congressional Web site, it states: “As long as the Federal government takes tax money from [Paul's] constituents, he will make every effort to return that money to his district.”
Comforting logic, consistent with our Constitution? Not really.
This isn’t the first time Congressman Paul has been caught with his hand in the federal cookie jar. In August of last year, a Wall Street Journal article highlighted Paul’s request for 65 earmarks costing nearly $400 million. This included $8 million for marketing shrimp, and $2.3 million for shrimp-fishing research.
At the time, Paul’s spokesperson told the Journal that, “Reducing earmarks does not reduce government spending, and it does not prohibit spending upon those things that are earmarked.”
“What people who push earmark reform are doing is they are particularly misleading the public — and I have to presume it’s not by accident,” the spokesperson added.
Again, not a very convincing logical justification. And, Paul’s spokesperson certainly didn’t explain how marketing shrimp is consistent with the U.S. Constitution.
Paul is far from the top of the list of Big Spenders in Congress, but he isn’t at the bottom either. Earmarks are a small portion of Congress’ overall spending; however, you have to start somewhere to cut spending, and eliminating earmarks is as good of a place as any.
Although Paul ended up voting against the $410 billion spending bill, he still had his hands in the cookie jar. At the end of the day, he’ll end up with taxpayer cash flowing into his district, but can boast about a clean record.
A list of Congressman Paul’s 2009 earmark requests can be found here.
Or, perhaps, “all of the above”. From the UK Telegraph:
Sources close to the White House say Mr Obama and his staff have been “overwhelmed” by the economic meltdown and have voiced concerns that the new president is not getting enough rest.
British officials, meanwhile, admit that the White House and US State Department staff were utterly bemused by complaints that the Prime Minister should have been granted full-blown press conference and a formal dinner, as has been customary. They concede that Obama aides seemed unfamiliar with the expectations that surround a major visit by a British prime minister.
But Washington figures with access to Mr Obama’s inner circle explained the slight by saying that those high up in the administration have had little time to deal with international matters, let alone the diplomatic niceties of the special relationship.
Allies of Mr Obama say his weary appearance in the Oval Office with Mr Brown illustrates the strain he is now under, and the president’s surprise at the sheer volume of business that crosses his desk.
A well-connected Washington figure, who is close to members of Mr Obama’s inner circle, expressed concern that Mr Obama had failed so far to “even fake an interest in foreign policy”.
And here we were led to believe Mr. Obama was this cool, multitasker under full control and able to handle everything the job entailed.
That’s what we were led to believe.
Some of us, however, said that of all the jobs on the planet this wasn’t the one for OJT. This isn’t a job where one aspect of the duties can be ignored to concentrate on others.
Guess which group looks more prescient at the moment?
Apparently Timothy Geithner isn’t the financial “rock star” he was touted to be if his handling of the Asian crisis 10 years ago is any indication.
While Obama may have “inherited” the financial problems, the bear market is all his.
Speaking of lay-offs, this isn’t going to make our jet jocks feel very secure.
The new slogan of the Democrats – never let a good crisis go to waste. So this is a “good” crisis?
Take a look at this page and tell me where are the promised tax money from rich folks is going to come from.
If you don’t believe government is contemplating some pretty heavy care rationing when and if they get control, read this little beauty carefully.
Even George McGovern finds the pending card check legislation desired by unions to be “fundamentally wrong” and undemocratic.
Grey wolves “delisted” from endangered species list.
No time for Gordon Brown, but plenty of time for Brad Pitt. Wonder if Pitt got a 25 volume DVD set too?
Is Obama preparing the way for a massive defense spending cut?
Even Paul Krugman is getting a little antsy about the apparent lack of focus of the Obama administration on the financial crisis.
It appears Hugo Chavez recognizes a kindred spirit when he sees one.
The Senate is one vote short of passing the omnibus spending bill with 9,000 earmarks. All I wonder is which Republican will cave first?
I think what is happening at the Seattle Post-Intelligencer and other newspapers is an indication of where that industry is headed:
The Seattle Post-Intelligencer reports that its owner, Hearst Corp., has made offers to some staffers to participate in an online-only version of the newspaper.
The paper says an unspecified number of the P-I’s roughly 180 employees received “provisional offers” Wednesday and Thursday to work for the online venture, if the Web site is approved by Hearst’s senior management.
Hearst announced in January it would put the P-I up for sale and either close the paper or go to an online-only publication if it couldn’t find a buyer by March 10. There has been no word on a possible buyer.
These are very tough times for the print media. And, at least among the big dailies, they’re burning through money like GM with no bailout in sight. They’re stuck with a business model that no longer works. And it has happened in a very short time, relatively speaking. The problem is, those who run the business have never faced times like this. Already in trouble before the financial crisis, the trouble has now been accelerated beyond measure.
I’ve worked in and around the industry for almost 25 years. Newspapers had a tendency to make money despite themselves sometimes, and were always a profitable business. In effect, they held a pretty solid position as being one of the only outlets for news in a city, region or state. Sure television had some effect, but not at all the effect many in the business worried about. Detailed stories, not 30 second to a minute coverage found on TV, could only be found in newspapers.
Another critical aspect of newspaper revenue was classified ads. They were the go-to place for jobs, cars, real-estate, etc. It was that revenue and advertising revenue which kept them profitable. Subscriptions never were their primary source of revenue.
Then Al Gore invented the internet. And newspaper big-wigs worried about the impact. The impact was subtle at first. But as the breadth and depth of the ‘net grew, newspapers finally figured out the ‘net was a serious threat to them. The problem was they believed they were in the printing business instead of the news delivery business. So we saw these attempts to jazz up newspapers with more color and snappier features. But none of that really matters when the news that’s delivered is a day old and available when it happens on line. Stale news does not sell well.
Then production costs started to go up. Newsprint has gone through the roof. Aluminum costs (plates) have risen dramatically. All the while, ad revenues have steadily dribbled away as advertisers found newer, cheaper and vastly wider coverage on-line. Classified advertising began slowing as eBay and Craig’s List began siphoning away potential customers with their wider reach. Firms tying to fill jobs went on-line as well.
Page count dropped. Subscriptions no longer even covered the cost of the newsprint each edition required. Web widths were cut. Every economy that can be thought of was enacted. Production facilities have been shut down and consolidated. Automation has been used to replace headcount. Vendors have been squeezed for every penny that can be squeezed. But formerly profitable newspaper groups are now hemorrhaging money and frankly they don’t know how to stop it.
That’s not to say all newspapers are in that sort of trouble. Interestingly the small town newspapers seem to be doing okay. They’re not raking in the money they used too, for sure. But they seem to be surviving. One of the reasons is they are in a unique position which large town and city newspapers don’t enjoy anymore. In many cases they are the sole source of news for that community. Some have local TV stations that cover news as well, but the in-depth coverage over many weeks that local stories sometimes require can only be found in the paper. Additionally many of these small town papers have a production facility that is bare bones but has been printing other business for years – neighboring weekly papers, commercial work, etc. So their production facility is at least paying for itself. And while they have an on-line presence, it is more of a business an archive site. They don’t deal much in national and international news. They’re focused almost exclusively on the community they serve and the news it generates. If you want national or international news, go to CNN – they know you do that anyway.
With the closing of the Rocky Mountain News, the possible closure of the San Francisco Chronicle and the Seattle P-I’s decision to go on-line only, you can see the larger newspapers are still struggling to find a business model that works. I’m of the opinion, and have been for a while, that the small town model, adapted for the larger communities, is the way to go – with an tight focus on covering the community they serve, an on-line presence that adds instead of detracting from the print edition and a plan for the future which takes the operation on-line through devices like the Kindle 2, provided as a part of the subcription for a certain subscription length.
Of course that means that the production end of it, which has been my bread-and-butter for many, many years, will go the route of the dinosaurs, at least among the larger newspapers. But I think that is the future. Small town papers will hold out for a while longer and continue to print, but the economies of scale won’t be there which enable paper companies to offer low prices on newsprint. My guess is, unless they have a tremendous base of commercial printing (other than newspaper printing), they’ll eventually come to a point where print production is cost prohibitive as well.
All of this, of course, means a much leaner staff for future newspapers. It will also mean a different way of billing -for subscriptions, advertising, etc. Single issue billing, subscription billing, even particular articles can be billed. And without the cost of production factored in, the pricing should be reasonable. In order for that to be attractive to potential buyers, the papers are going to have to deliver and necessary and attractive product that news consumers want.
That is the problem they are presently wrestling with. What is that product and how do we produce it and get paid to produce it?
I have no idea how this will shake out, but unlike many, I certainly don’t want to see newspapers go away. I think they’re a critical part of our nation’s democratic voice. But they are going to have to change and change radically to survive. It is going to be interesting to watch this over the next few years as the newspaper business goes through what the fed refuses to let the auto industry go through. My guess is, after all the bankruptcies, consolidations and mergers take place, a leaner, more focused and profitable business model will emerge. Whether they’ll be called “newspapers” is anyone’s guess, but they’ll still be with us in some form or fashion.
Today, the GOP released a request for proposal for a new web site. This is the RFP (PDF). I have read it all the way through. It’s quite a document. It’s an especially interesting read for someone like me, who responds to RFPs for web development for a living. I say “interesting” because it’s a masterpiece of confusion and idiocy.
I assume it was written by someone who has heard of this new thing called “com-poo-tors”, and who doesn’t actually have one, but has been told that they’ll be very big in the future.
Let’s take a little closer look at this document, shall we?
Integrate outside products through common API’s, widgets, or iframes (examples: Kimbia fundraising, Voter Vault, Widgetbox, Ning).
As far as I know, there is no common API for those applications. Each has it’s own API, I’m sure. They may be accessible through a common technology, i.e., any ODBC compliant data/programming model like PHP or .NET will probably be able to access them in some way. But there’s not going to be anything common about it. I also love the use of the term “widgets”. Because every tech person knows what a “widget” is. It’s such a specific term.
But the best part is asking for the use of the IFRAME tag. I guess that’s OK. As long as you won’t be wanting to use the XHTML Strict doctype, or anything. Or you’ve never heard of the OBJECT tag.
Flash interfaces can often make mundane tasks exciting, and having Flash developers who understand user behavior will make the site more user-friendly.
Well, that’s a perfectly uncontroversial statement. If there’s one thing that everybdy in the web-based tech community agrees on, it’s how wonderful Flash is. because it makes things, you know, move. And it’s so easy to optimize for search engines!
An ideal client will have a CMS that is already built out and ready to plug into the system, so the only programming time will be building the outward facing presence.
“No limitations on design”? Oh. OK. There’ll be no limitations on cost, then.Because, as everyone knows, every CMS system uses the exact database schema that the RNC uses, so there will need to be no data import, or customized programming to access the RNC’s content data. All you have to do is install the CMS, and, like magic, the only work you’ll have to do is set up a really nice theme. And how convenient that Flash will require no custom ActionScript programming to integrate into the CMS.
The really helpful thing about the RFP is that there are no indications of what database backend the RNC uses, no information about the database size or schema, no indication of the server technology they’d like to use, or, actually, any technical details at all. But, when you throw all that stuff in, the RFP gets so, you know, long, and boring.
But long and boring is one thing this document is not. In fact, it’s only two pages long. Once you start throwing that sort of stuff in, you end up with a hideous and stuffy nightmare of an RFP like this.
But, one thing the RNC does want: They want to know what it’ll cost them.
All costs of the project will be delivered with proposal.
Well, it’s a good thing the RFP is so chock full of the kinds of detailed information that will allow a contractor to make accurate time/cost estimates. But, I kid. In actuality, the RNC has made costing this proposal childishly simple, with the addition of this:
No limitations on design; the RNC will be in on the entire process and will ensure everything is to our exact specifications.
“No limitations on design”? Oh. OK. There’ll be no limitations on cost, then. Your web site will cost $∞. Or, whatever amount causes you to stop saying, “I’m done fiddling with it now.” It’s up to you.
I’ll be billing every two weeks, thanks.
Surely this is all some sort of elaborate joke. Perhaps on Monday the RNC will tell us that they were just having us on. Then, once we’ve all had a good laugh, they’ll release the real RFP.
Because whatever this document is, it’s not an RFP. At best, this is some sort of marketing-related statement of intent. It’s nothing more than a series of barely-related bullet points that say:
- We want a cool web site.
- We want neat external applications to run on it.
- Flash is fun.
- We want it to be easy to use, ’cause we ain’t got us much of that compooter learnin’.
- Make it pretty.
This the new, high-tech-savvy GOP? This is the kind of in-depth attention to leveraging technology that the refurbished, Michel Steele RNC has planned?
This is a travesty. And it’s sad. Especially since the opening paragraph states:
This RFP and the ambitious goals behind it result from the help of the RNC Tech Summit and the 7,000 grassroots volunteers who participated both online and in-person.
Wow. That must have been an über-effective tech summit.
Barney Frank has gotten very full of himself. So full, in fact, that his memory isn’t working as well as it probably should:
House Financial Services Chairman Barney Frank (D-Mass.) is pressing state and federal authorities to seek criminal and civil penalties on financial actors that helped cause the current crisis.
“Rules don’t work if people have no fear of them,” Frank said at a press conference Thursday.
He announced a hearing March 20 with Attorney General Eric Holder, bank regulators and the Securities and Exchange Commission as witnesses to discover what their plans are to prosecute irresponsible and in some cases criminal behaviors.
I wonder if he’d include this guy:
A September report from the Business & Media Institute suggests one possible target for investigation: a senior member of the House Banking Committee. This congressman is “a recipient of more than $40,000 in campaign donations from Fannie since 1989″ and “was once romantically involved with a Fannie Mae executive.” The same congressman “was and remains a stalwart defender of Fannie Mae.”
In case you’re not up to speed, that “senior member” mentioned is House Financial Services Chairman Barney Frank (D-Mass.).
Some specifics about the record job losses:
Hiring last month in goods-producing industries fell by 276,000. Within this group, manufacturing firms cut 168,000 jobs bringing the total since the recession began to 1.3 million.
Construction employment was down 104,000 last month. The unemployment rate in that sector is now 21.4%, almost double where it was this time last year.
Service-sector employment tumbled 375,000. Business and professional services companies shed 180,000 jobs, the fourth-straight six-figure loss, and financial-sector payrolls were down 44,000.
Retail trade cut almost 40,000 jobs, while leisure and hospitality businesses shed 33,000 as households curtail nonessential spending.
Temporary employment, a leading indicator of future job prospects, fell by almost 80,000.
So there, in a nutshell, is the status of the productive sector of the economy – the sector that produces wealth, jobs and growth. The sector that should be the focus of any recovery plans and stimulus money.
Instead, what is the President talking about in Ohio, as he panders in the buckle of the rust belt (via email transcript)?
Today I’m pleased to announce that Attorney General Eric Holder and the Department of Justice are making available $2 billion in justice assistance grants from the recovery act. (Applause.) That’s funding that will help communities throughout America keep their neighborhoods safer, with more cops, more prosecutors, more probation officers, more radios and equipment, more help for crime victims, and more crime prevention programs for youth.
Cities and states can apply for these funds right away, and as soon as those applications are received, the Justice Department will start getting the money out the door within 15 days. In Savannah, Georgia, the police department would use this funding to hire more crime and intelligence analysts and put more cops on the beat protecting our schools. In Long Beach, California, it will be able to help fund 17,000 hours of overtime for law enforcement officials who are needed in high-crime areas.
West Haven, Connecticut, will be able to restore crime prevention programs that were cut even though they improved the quality of life in the city’s most troubled neighborhoods. And the state of Iowa will be able to rehire drug enforcement officers and restart drug prevention programs that have been critical in fighting the crime and violence that plagues too many cities and too many towns.
So the list goes on and on. From Maine to San Francisco, from Colorado to New Jersey, these grants will put Americans to work doing the work necessary to keep America safe. They’ll be directed only towards worthy programs that have been carefully planned and proven to work. And Vice President Biden and I will be holding every state and community accountable for the tax dollars they spend.
More cops, more prosecutors, more parole officers.
Private sector jobs? Nada.
Now I understand we need all of those people he talks about. But they won’t help one bit in creating new wealth, new jobs or new opportunities for both, will they? They’re a number Obama can point too when he tries to sell is jobs “saved or created” nonsense in a few years. But as far as a stimulus to the economy – huh uh. What they are, however, are precisely what is expected from a big government liberal – government jobs.
As the WSJ further informs us after giving us the bad news about the productive sector of the economy above, “the government added 9,000 jobs.”
The International Criminal Court (ICC) has no real power of enforcement. It is one of those bodies that the “one world” crowd managed to get formed and funded in hope of creating the penultimate judicial body that can adjudicate criminal complaints against political and military leaders anywhere in the world. It depends on voluntary compliance with its indictments and voluntary submission to its rule. As you might imagine, that’s not as forthcoming as its planners thought it might be – especially among the nations most in need of straightening up. Such as Sudan:
blockquote>Thousands of people protested in Khartoum on Friday after preachers condemned an International Criminal Court arrest warrant for Sudan’s president on charges of war crimes in Darfur.
It was the third day of demonstrations after the Hague-based court announced it was indicting President Omar Hassan al-Bashir on seven counts of war crimes and crimes against humanity, including murder, rape and torture.
While everyone agrees that what is happening in Darfur is a crime against humanity, it is a crime that the world has allowed to continue for almost 20 years. So one has to wonder, other than a bit of moral preening by the ICC, what utility issuing an arrest warrant for the head of state of Sudan might have. Will it actually facilitate his arrest and end the problem in Darfur? Will it improve the conditions and security for those in danger in Darfur? After all, if it is the conditions and the plight of those in Darfur that the ICC is using as the basis of its criminal complaint, wouldn’t you hope that such a move would improve that situation rather than worsen it?
As it turns out, it does “none of the above”. The issuance of the arrest warrant by the ICC has instead caused all the aid agencies working to save the refugees to be thrown out of the region on suspicion they’re passing evidence of crimes on to the ICC.
Of the 76 NGOs in Darfur with which the U.N. is working, the 13 that have been expelled account for half the aid that is distributed in the region, said Elisabeth Byrs, spokeswoman for the U.N. Office for the Coordination of Humanitarian Affairs.
Their departure would leave 1.1 million people without food, 1.5 million without medical care and more than one million without drinking water, she told the briefing.
“It will be very, very challenging for both the remaining humanitarian organizations and for the government of Sudan to fill this gap,” she said.
Of course the argument might be “we should confront evil where ever we find it” and I don’t disagree. But issuing a toothless arrest warrant that only agitates the person named to the point that over a million people are placed in peril doesn’t exactly live up to the word “confront” in my book. It is a moral “feel good” activity which may spur an immoral reaction beyond anyone’s control. And that seems to be the case here.
It is one thing to issue the sort of warrant the ICC has issued and then take the action necessary to serve and enforce it. But in the absence of that, what is the utility of issuing such a warrant without such an enforcement mechanism, especially given the range of possible negative reactions and outcomes? Whatever happens now to those million people at risk in Darfur, as a result of the ejection of the aid agencies so key to their survival, rests squarely in the lap of the ICC. I’m not arguing that al-Bashir isn’t a murdering criminal or that the world shouldn’t do what is necessary to stop his crimes against the people in Darfur. But what shouldn’t be done is hand him a reason to further endanger those people by issuing unenforceable warrants that make the rest of the world feel morally superior but actually worsens the threat against those who can’t defend themselves.
David Brooks, 3 days after a semi-courageous, “what-the-heck-is-going-on” column, received calls from the senior staff at the White House and quietly got back in line:
In the first place, they do not see themselves as a group of liberal crusaders. They see themselves as pragmatists who inherited a government and an economy that have been thrown out of whack. They’re not engaged in an ideological project to overturn the Reagan Revolution, a fight that was over long ago. They’re trying to restore balance: nurture an economy so that productivity gains are shared by the middle class and correct the irresponsible habits that developed during the Bush era.
The budget, they continue, isn’t some grand transformation of America. It raises taxes on energy and offsets them with tax cuts for the middle class. It raises taxes on the rich to a level slightly above where they were in the Clinton years and then uses the money as a down payment on health care reform. That’s what the budget does. It’s not the Russian Revolution.
How moderately wonderful, right? They’ve now dazzled Brooks again. They’re not “liberal crusaders”, they’re moderate pragmatists who want to lend stability to the economy.
Brooks then goes through a litany of things “Republicans should like”. He finishes up by claiming he still thinks they’re trying to do too much too fast, and that may lead to problems “down the road”, but all in all, he’s impressed by their sincerity, commitment to what is best for America and the fact that all of this is not going to cost anywhere near what all the critics claim.
On their face, the arguments are nonsense. This is the biggest planned expansion of government in a century. Estimates are the federal government will be hiring between 100,000 and 250,000 new employees to oversee its new programs and spend the trillions of dollars being borrowed through debt instruments right now.
Unlike the rather facile and easy to impress Brooks, Charles Krauthammer takes a look at the spin and deconstructs it rather handily.
At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan’s Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.
The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.
And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.
As Krauthammer points out, none of the costly things that Obama pledged to focus on have anything to do with the down economy. They all do, however, include the the probability of causing even more damage if enacted.
And since they’ve been in office, Obama or his surrogates (mostly in the guise of Timothy “tax cheat” Geithner”) have talked down the stock market, the auto industry, the oil and gas industry, the health care industry, energy, banks, financial and the defense industry. They still don’t seem to realize what impact their words have on markets, or if they do, then one has to assume they’re doing this on purpose. I tend toward the side of ignorance, but at some point, after it has been pointed out to them over and over again, you have to abandon that belief and head toward the other conclusion. Their words, quite literally, are wrecking the economy.
Markets can’t stand instability and insecurity. When leaders talk about what’s wrong with this industry or that industry and what they intend on doing to punish or change how that industry does business, investors get very nervous. As you might imagine, they’re extremely nervous right now, as reflected by the Dow. They know that there is a government assault coming, in some form or fashion, on the industries I’ve mentioned. So they’re going to get out of the position they now hold in them and they’re going to refrain from investing in them until they’re clear what that assault will entail. And I don’t use the word “assault” lightly.
Health care, defense, oil and gas, pharma, auto, energy, housing, banking, finance etc. are all under a form of assault by the new administration. Health care will change and expand dramatically under government auspices, oil and gas will lose tax breaks, cap-and-trade will bury the auto industry and shoot energy prices through the roof – affecting transportion and manufacturing. Cram-downs affect the housing, banking and financial sectors. Who wants to invest in any of that when a judge can reward irresponsible home owners with a write down of their principle? Meanwhile responsible home seekers will see the interest rate go up by about 2 points to cover the losses. That’ll spur homebuying, won’t it?
Like Dale pointed out about the Red Kangaroo, you can see this coming from a mile off. And “useful idiots” like David Brooks climb back on the bandwagon and resume cheering the parade to economic ruin.
This morning on the Opie and Anthony show, Aussie comedian Jim Jeffries was a guest, and he told an amusing story. It seems that he and some fellow comedians were travelling from Perth to Kalgoorlie for some sort comic event. Things went well for a bit, until, about three hours outside of Perth, they ran into an emu. The poor emu didn’t die immediately, and, tragically, had to be dispatched with a large rock. Their car, however, did die, due to radiator damage.
They were stuck in the Australian desert with no transportation. Fortunately, in Australia, they do keep cell towers along the major roads, so Jeff and the boys were able to call a fellow they knew back in Perth, to ask if he could come help them out, and if he did, they’d try to see if they could get him some mike time at the comedy show.
He agreed, and told them he’d be on his way in about an hour.
So, four hours later, Jeff saw his car, coming down the road a couple of miles away. He also saw, anbling slowly towards the road, a large Red Kangaroo. As he watched, the car get closer, he also watched the kangaroo come closer and closer to the road. And in what must have been sort of a horrified fascination, he watched the convergence until BOOM! The car and kangaroo collided.
Fortunately for them, their friend’s car was still driveable after the accident, although the ‘roo was a total write off.
But, the story really encapsulated the way I’ve been feeling watching the economy over the last several months. You can see the elements coming together for some sort of horrible wreck, but there’s not really anything you can do to stop it.
And it looks like the kangaroo is coming closer.
Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department…
Last week, the FDIC proposed raising fees on banks in order to build up its deposit insurance fund, which had just $19 billion at the end of 2008. That idea provoked protests from banks, which said such a burden would worsen their already shaken condition. The Dodd bill, if it becomes law, would represent an alternative source of funding…
The FDIC would be able to borrow as much as $500 billion until the end of 2010 if the FDIC, Fed, Treasury secretary and White House agree such money is warranted. The bill would allow it to borrow $100 billion absent that approval. Currently, its line of credit with the Treasury is $30 billion.
Let’s examine the implications of this. TheFDIC fund is now depleted, and needs to be recharged. Not with $30 billion, but with $500 billion. Banks howled at premiums being increased, saying it could damage their business even further. So now Sec. Geithner, Chmn. Bernanke, and Chmn. Bair are asking for the federal government to open their credit line, which is currently restricted to $30 billion.
Does this mean that the SecTreas, FDIC, and Federal Reserve all believe the FDIC may need to come up with half a trillion dollars to pay back depositors for bank failures? If so, that’s…disturbing.
What do they know about the health of banks that we do not in order to come up with that number? What will the general public do if they figure out the implications of this? How will the markets respond?
Hop. Hop. Hop.