Tuesday, September 30, 2008

Can Happy Days Be Here Again?

Now that Congress has rejected the terrible Wall Street bailout, we have two options: enact a good bill or do nothing. Either of these options would be better than trying to pass the bill that was rejected by Republicans and even some Democrats.

If we are going to try to do something before the election, here are some provisions that a new bill must include if Republicans are going to support it:

1. The worst provision of the bailout bill was the cap on executive compensation. Many of these executives are already underpaid and they are suffering terribly as their stock options become worthless. One reason why some companies have not performed as well as they should have was that their executives were too distracted trying to make ends meet to focus on their jobs and they were worried about what will happen to them if they become unemployed. They are no doubt chilled by what happened to AIG CEO Martin J Sullivan when he resigned in July after AIG wrote down $20 billion in losses on assets linked to subprime mortgages. He got a measly severance package that only amounted to $47 million, which will be worth even less in 2009 dollars if the economy continues in the direction it’s headed. What incentive are executives going to have to work hard and pull their companies out of debt if we cap their compensation and how are we going to convince some poorly performing executives to resign if we don’t promise them hefty golden parachutes?

2. Even worse, the bailout bill contained no provisions guaranteeing Christmas bonuses for Wall Street workers. Doesn’t anyone in Congress understand how Wall Street works? Telling Wall Street workers that Santa Claus might not come this year would be devastating for our economy, which depends on the infusion of cash it gets each Christmas as investment bankers spend their bonus checks buying condominiums and boats and indulging in lavish meals in luxury restaurants. How can we hope to get out of this economic slump if we do not guarantee the Christmas bonuses that keep our economy going?

3. As Larry Kudlow pointed out the bailout bill went “beyond France into pure socialism” and we all know that socialism (not to mention anything French) is just about the worst thing there is. “If the U.S. government is going to start to own all of our financial institutions,” wrote Kudlow, “all these markets will sink like stones.” So how can the government buy up all of these assets but avoid owning financial institutions? There is a very simple solution. The government could immediately privatize these assets by giving them away to outgoing members of the Bush Administration, who will be losing their jobs in January and forced to fend for themselves in an uncertain economy. That would kill two birds with one stone: America would be saved from socialism and former members of the Bush Administration would be spared the indignity of having to take jobs as lobbyists or beg their friends for seats on corporate boards.

4. If Democrats expect Republicans to vote for any bailout bill, it must include a gag rule that prevents Democrats from saying nasty things about them. According to House Minority Leader John Boehner, Nancy Pelosi’s very mean and partisan speech “poisoned” the debate and “caused a number of members we thought we could get to go south.” Although Barney Frank promised to talk “uncharacteristically nice” to Republicans who decided not to vote for the bill because of Pelosi’s statements, that will not be enough. Republicans are not fools. They need a guarantee in writing that Democrats will not ridicule Republicans in the days leading up to the election and try to blame them for the financial crisis. “Now is not the time to fix the blame," said John McCain, blaming "Senator Obama and his allies in Congress" for infusing "unnecessary partisanship into the process."

5. The bill must include anti-illegal immigrant provisions. As Rep. Tom Tancredo pointed out, this economic crisis is mostly the fault of illegal aliens. Although he didn’t have exact figures on the number of illegal aliens who fraudulently purchased homes, he is certain that illegal aliens are somehow to blame. “We need to ensure that the ‘American Dream’ remains within reach of American families – and that means enacting some long overdue safeguards that prevent illegal aliens and their unscrupulous allies in the financial industry from undermining its integrity,” said Tancredo in a press release. Although he promised to oppose any bill that did not include safeguards forcing illegal aliens to live on the streets (with an exception, of course, for any “wealthy foreign real estate investor or financier of a vacation home”) and then voted for the bill anyway and deleted this press release from his website, I’m sure he won’t make that mistake again. If Democrats expect Tancredo and other Republicans to vote for the next bill, it must include these safeguards and a statement blaming illegal immigrants for our financial woes, written in English only.

6. The bill must include a cut in the capital gains tax. Why? Because Republicans will not vote for any finance bill that does not include a cut in the capital gains tax, which will eventually trickle down and help average Americans.

If a bill does not include all of these provisions then Republicans should vote against it, which brings us to Option 2: doing nothing. Some economists believe that doing nothing could result in another Great Depression, but is that such a bad thing? There is a reason it was called the Great Depression and not, say, the Terrible Depression. According to economist J. Bradford Delong, members of the Hoover Administration, influenced by the theories of Austrian economists like Friedrich von Hayek and Joesph Schumpeter, believed “that in the long run the Great Depression would turn out to have been ‘good medicine’ for the economy.” Unfortunately, Hoover was swept out of office before this theory could be tested and Franklin Roosevelt enacted all kinds of socialistic policies that bedevil us to this day. So perhaps the best thing we could do is do nothing and bring on another Great Depression, but let’s do it right this time. Sure, there would be some temporary pain, and some people might be forced to wait in bread lines and sell apples in the street, but in the long run it would be better for our economy to shake out the weak links. Some Republicans might be reluctant to come out in support of triggering a new Great Depression in an election year so John McCain is going to have to show some leadership, the kind of leadership he showed in scuttling the first bill, to bring Republicans in Congress around. Coming out in favor of a Great Depression would show voters that John McCain really is a new kind of leader and it might just be the Hail Mary pass that wins him the election.

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yellojkt said...

Your recommendations do not go far enough. The Treasury must buy all these underperforming loans at face value because that is what Wall Street thought they should have been worth. Otherwise, the terrorists have won.

Anonymous said...

Dear Mr. Swift:

Once again, you are demonstrating the wonderful analytical powers of a true conservative.

Like you, deep in my heart, I sincerely hope that President Mc Cain will usher the Greatest Depression, which will make the bang that ended the roaring twenties sound like a whisper.

Our best days are right around the corner.

PS: A bill should include a 'Financial Trauma Disorder Fund' to compensate the executives for their anguish.

Anonymous said...

As long as we don't have to fight another world war afterwards, I'm on board.

Anonymous said...

I guess pretending to be a reasonable conservative doesn't necessarily mean you are rational, or even able to add and subtract.

See, Jonny, the Democrats have enough members in Congress to pass any bill they want without Republican cooperation.

All they have to do is get their own party members to cooperate.

Seems they can't.

Regards, and here's pissing on Karl Marx's grave.


Comrade Kevin said...

Mr. Swift, why do you hate America?

Friðvin said...

Sometimes it is indeed better to start from scratch rather than attempt to salvage a broken system.

It's like trying to remove too much salt from a cake batter after the cake is in the oven.

Anonymous said...

Comrade Kevin said...
Mr. Swift, why do you hate America?

Comrade Kevin:

If you pay close attention - or any for that matter - to what "Jon" writes, you will eventually discover that he not only isn't a "reasonable conservative", but that he doesn't really hate America either.

He just hates heterosexual free market advocate type goys from the Midwest. Or from anywhere else ...

His pantomime "reasonable conservative" is just his very own and unique, or semi-unique, or, ok, his derivative and shopworn way, of expressing it.

It's just Jon using satire to argue for a more just, collectivist, and eventually totalitarian world. One where people will spend less time focusing on their own selfish interests, and more on his.

The blessings of Mother Gaia be upon you Kevin, and Kumbaya!

Anonymous said...

I totally adore you, Mr. Swift.
Also, your comment threads are about the funniest ones I ever read.

JGF said...

A masterpiece, even by your usual standards.

I'm so glad you're feeling inspired to write again.

A second Magda's observation. The comment threads are hilarious.

Admit it, you must write the "anonymous" comments yourself. They are priceless.

Anonymous said...

Reasonable conservative don't have to be able to add or subtract. They have people to do that.

Anonymous said...

Just remember your mother probably has investments which could one day be yours if "the powers that be" ever quit trying to have it all.

Anonymous said...

Up here in Canada we are green with envy over the excitement and hilarity that is being caused by the tanking of your economy. Unfortunately our situation is bland and boring. Sure we have a federal election too, but it pales in comparison to the hijinks and opportunities for mocking commentary that you guys have.

Its just not fair.

Anonymous said...

John Gordon wrote: "A masterpiece, even by your usual standards."

It certainly is John. All the more so as Jon Swift's headlong Novak pratfall seemingly defines his standard.

"... A second Magda's observation. The comment threads are hilarious.

Admit it, you must write the "anonymous" comments yourself. They are priceless.

9/30/2008 11:05 AM "

They must be, because yours aren't.

Priceless that is. Precious yes, priceless, no.

Anonymous said...

Richard Stanczak said...
Up here in Canada we are green with envy over the excitement and hilarity that is being caused by the tanking of your economy. Unfortunately our situation is bland and boring. Sure we have a federal election too, but it pales in comparison to the hijinks and opportunities for mocking commentary that you guys have.

Its just not fair.

9/30/2008 12:37 PM

Anyone having access to the CBC or Internet, would find it otherwise.

There is plenty of hilarity on the Canadian political and social scene.

It's just that you have already pretty much gone over the edge, and so, the mockery takes on a somewhat more rueful edge.

When it is even allowed by your laws that is.

ThePoliticalCat said...

You have given me reason to live again.

Anonymous said...

Who do you think all of those Americans are calling Congress to say no bailout? They are already forced to wait in bread lines and sell apples in the street from getting screwed by this credit economy. Let them eat grocery store cake!

Anonymous said...

Jon Swift wrote:

" So how can the government buy up all of these assets but avoid owning financial institutions? There is a very simple solution. The government could immediately privatize these assets by giving them away to outgoing members of the Bush Administration, who will be losing their jobs in January and forced to fend for themselves in an uncertain economy."

I see you recognize the problem of handing people like Clinton administration refugees Raines and Gorelick billions worth of assets as playthings, while retaining liability for their misdeeds.

It obviously didn't work.


Anonymous said...

Really, I don't know what to say - three posts in five days? What bounty! Thank you.... Oh, and sorry to hear about your dog.

Alex Higgins said...

Fight the Wall Street Bailout

This bailout is nothing but bad news. There is no real crisis, the market sell of is a result of fear mongering by President Bush

The bill allows for foreign banks to dump all of their bad assets into American banks, who can in turn sell the debt to the treasury.



Congress will meet again tomorrow to vote on a revised version of the bill.


It allows foreign banks from Nation Like China and England to transfer an unlimited amount of bad debt to be transferred to our tax bill.


Please contact your congress men. Call them, fax them, email and tell them no way before its too late.

Visit blog.alexanderhiggins.com to learn how to help

Kilroy_60 said...

When I came looking for a post I could give a thumbs up on StumbleUpon I knew you wouldn't disappoint me.

This post was loaded with laughs for me. But, then, I drink.

{my page}

OutOfContext said...

No current or future depression will ever be as painful as The Great Depression; Ruby Keeler is dead.

Liberally Beautiful said...

Wonderful analysis and right on the "money". What I am most amazed about is the "conservatives" who read your blog and miss your keen perception and parody. My husband used to work for Sprint, so I totally understand the anquish of CEO's like Forsee that must face unemployment on a measly $40 million and only $1 million annually. How cruel the fates!

If Prez McCain should get his Greatest Depression I hope you will not suspend your blog again.

I truly hope that McCain Greatest Depression is only a personal experience for him and that he retains his senatorial status.

James Higham said...

In answer to your initial question and given the people in charge ... no.

Micgar said...

Coming out in favor of a new Great Depression would be kinda mavericky of John McCain.

bi -- International Journal of Inactivism said...

My friends, the "Wall Street crisis" has been cancelled, my friends.

Anonymous said...

Mr Swift,
I appreciate your comments, they are right on the mark. I would also like to see another war and the installation of the draft. The radical liberals are always calling for socialism when the government already pays for the salaries and benefits for hundreds of thousands of US citizens who serve in our armed forces and work for defense contractors. How can they ask for more? Well Mr Swift, we should give it to them. Our great country is best at creating, using, and selling arms. This is our "specialty of trade" as Adam Smith might say. We should continue massive exports of our guns, planes, bullets, body armor, tanks, Humvees, etc. Also, the more citizens we draft into our expanding wars, well, there goes our healthcare and unemployment problem! Keep up the righteous work!

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