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TMQ on the Washington-Wall Street attempted shakedown of America:

[O]n Sept. 12, Treasury Secretary Henry Paulson said the financial system had been fixed and “under no circumstances” would there be further bailouts; on Friday, Paulson said the system was collapsing and another $700 billion was needed. Suddenly Paulson is insisting the country has no choice other than immediately to hand over $700 billion to Wall Street fat cats, with barely any debate or even explanation of the plan. Why should anyone believe this guy, when just one week previously he said no further bailouts would occur? It seems clear Paulson had no idea what he was talking about then, while if the problem is really as bad as Paulson says now, his past delay in facing the problem has made the cost far higher. With such a poor track record, why is the treasury secretary suddenly viewed as a superbrilliant genius whose marching orders must be followed?

The only responsible answer, the only intelligent answer, to King Paulson’s demands for $700 billion for his corrupt buddies, is UNDER NO CIRCUMSTANCES will any money be given to Wall Street. The proposed plan simply will not prevent any of the problems that Paulson falsely claims it will prevent; the man has ZERO credibility in these matters.

J. Goldberg wisely concurs:

Paulson’s plan basically says, “I am the Lord thy God,” and that’s crazy. Also, it seems to me that Newt and the editors of NR are right when they worry that the Paulson plan essentially opens the door to unending government control of capital markets and that, too, is just crazy. Even if I completely trusted the wisdom of Paulson and his bureaucrats — which I don’t — there’s no way that I trust the Dodds, Franks or the next Treasury secretary. Every day the markets don’t go off the cliff suggests to me that we can do this in stages and that Paulson’s do-it-my-way-or-it’s-the-Dark-Ages-for-us-all argument doesn’t hold water.

I hope everyone doesn’t mind if I remind them once again that the “Dark Ages” were a myth. As is the idea that Henry Paulson’s just slightly self-serving assertion that giving him Caesar-like power and trillions of dollars is all that stands between American and economic catastrophe.

UPDATE – Unbelievably, Wall Street IS ATTEMPTING TO PLAY THE FREE MARKET CARD in defense of wildly overpaid executives:

Wall Street, its lobbyists and trade groups are waging a feverish lobbying campaign to try to fight compensation curbs. Pay restrictions, they say, would sap incentives to hard work and innovation, and hurt the financial sector and the American economy.

“We support the bill, but we are opposed to provisions on executive pay,” said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a trade group. “It is not appropriate for government to be setting the salaries of executives.”

Some corporate governance experts say hastily devised compensation curbs in the bailout package would be a mistake and perhaps open the door to unintended consequences.

Clearly the Indians have the correct view of how to reward these disgusting and shameless creatures. Americans should tell George Bush, Henry Paulson, Ben Bernanke and all of Wall Street to go to Hell without passing Go or collecting $200, let alone $700 billion. Their exercise of power has been the problem, so giving them more will only exacerbate it.

We’ve heard this song before, at least in the economic sense. It’s Fascism without the violence or the Italian nationalism:

The Paulson rescue plan is one chapter. But there will be others. Over the next few years, the U.S. will have to climb out from under mountainous piles of debt. Many predict a long, gray recession. The country will not turn to free-market supply-siders. Nor will it turn to left-wing populists. It will turn to the safe heads from the investment banks. For Republicans, people like Paulson. For Democrats, the guiding lights will be those establishment figures who advised Barack Obama last week — including Volcker, Robert Rubin and Warren Buffett….

The government will be much more active in economic management (pleasing a certain sort of establishment Democrat). Government activism will provide support to corporations, banks and business and will be used to shore up the stable conditions they need to thrive (pleasing a certain sort of establishment Republican). Tax revenues from business activities will pay for progressive but business-friendly causes — investments in green technology, health care reform, infrastructure spending, education reform and scientific research.

If you wanted to devise a name for this approach, you might pick the phrase economist Arnold Kling has used: Progressive Corporatism. We’re not entering a phase in which government stands back and lets the chips fall. We’re not entering an era when the government pounds the powerful on behalf of the people. We’re entering an era of the educated establishment, in which government acts to create a stable — and often oligarchic — framework for capitalist endeavor.

Neither the Paulson plan nor any other plans concocted by the Progressive Corporatists will work as advertised. They cannot work because they fly in the face of immutable economic reality. What they will do, however, is serve the interest of the Establishment of which Mr. Brooks speaks so highly.

This Indian response to financial crisis would not only be more emotionally satisfactory for American taxpayers, it would almost surely work better than the administration-proposed “give hundreds of billions of dollars to the guys who created the problem in the first place and pretend there’s a snowball’s chance in Hell that they’ll get it right this time” bailout:

Corporate India is in shock after a mob of sacked workers bludgeoned to death the chief executive who had dismissed them from a factory in a suburb of Delhi. Lalit Kishore Choudhary, 47, the head of the Indian operations of Graziano Transmissioni, an Italian-headquartered manufacturer of car parts, died of severe head wounds on Monday afternoon after being attacked by scores of laid-off employees, police said.

If Americans are going to have socialism crammed down their throats by so-called “conservative” and “liberal” politicians anyhow, they may as well have the satisfaction of sending to the guillotine all the Wall Street crooks who robbed them blind and are attempting to pull off their largest heist yet.

A return to hereditary monarchy would be much better than anointing the Secretary of the Treasury as Fuhrer of the National Economy:

That’s right – every bank and other financial institution in the United States has just become a de-facto organ of the United States Government, if Hank Paulson thinks they should be, and he may order them to do virtually anything that he claims is in furtherance of this act. This might include things like demanding that a bank or other financial institution sell him its paper, even if it forces that firm to collapse and be assumed by the FDIC….

Having bought these securities for any price Mr. Paulson would like (and he can compel institutions to sell at his demanded price as noted above!) he can then sell those assets at any price he wishes, to anyone he wishes. It certainly is nice to be a “Friend of Hank”, and it most certainly sucks if you’re not.

This is just another attempt to take advantage of the American people’s fear of disaster. Do recall how 9/11 and the excuse of “fighting terrorism” has been used for a panoply of expansions of government power… this is the same technique but magnified in scope. If the financial system is broken, then let it fail. The probable consequences are vastly preferable to the likely consequences of this power grab.

The Democratic whack-jobs of the left are correct in two regards. First, the Republican Party elite really are national socialists in the economic sense of the term. They say “National Greatness Conservatives” but “national socialist” is actually more accurate. Second, George W. Bush absolutely deserves to be impeached and removed from office. His crimes are as blatant and far more serious than Bill Clinton’s. The Congressional passage of this proposal may well serve to demarcate the end of America as a nation with even the appearance of freedom.

A tangential thought: if depriving the government of one million dollars merits 11 years in prison, how much time will these bankers serve?

UPDATE – Obama does better than expected by getting it half right: “Obama said a combination of greed and unfettered free markets had brought the country to “a perilous moment …a financial crisis as profound as any we’ve seen since the Great Depression.”

There was greed, to be sure. But there was absolutely nothing free about the financial markets. They couldn’t have created a problem of such magnitude if the government had not been actively involved.

There are two types of women, feminina collega and femina economica. The former is a man’s companion and her driving instinct is to put the interests of her family before her own, to make a priority of her twin roles as a wife and mother. The latter, on the other hand, makes a priority of her economic situation; if she happens to marry then she is a man’s parasite. The Virgin Queen brings to our attention a stellar example of the latter, one which illustrates the previously blogged link observed between falling house prices and declining divorce rates:

We saved and scrimped and searched for three years before sinking everything we had and more into a home for ourselves and our two children, a tiny co-op in a fringy New York City neighborhood. The process left us emotionally and financially tapped. Then, three days before we closed on the apartment, my husband lost his job….

It may well be that if this financial and subsequent emotional crisis hadn’t driven a wedge between us, something else would have eventually done the job. It’s certainly fair to say that we’re not the same people we were when we married a decade and a half ago, in our mid-20s. But even if our financial disasters weren’t the cause of our breakup, they sure were the catalyst.

Yet they’ve likewise made us think long and hard about the consequences of ending it. I have spent hours at my desk, ruefully contemplating my Quicken spreadsheet, calculating my monthly income and expenses, trying to make the numbers turn out better. Emotionally, I couldn’t afford to stay in this marriage any longer. Financially, I don’t know how I’ll be able to afford to leave it.

It is the bizarre logic of femina economica that I find particularly fascinating. She has the desire- the need -to leave her marriage because her husband is unable to maintain her in the style she believes is necessary to her emotional well-being, so she is destroying their marriage and sacrificing their children’s emotional stability in order to embrace the probability of penury in economically difficult times on the remote chance that she might be able to either a) discover a hitherto unknown capacity for earning income that she would somehow not be able to utilize as a married woman, or, b) meet a wealthier man and convince him to financially support her and her children despite the fact that she is fifteen years older than she was when she settled for attracting a less economically fit specimen.

In the real world, the grass is seldom greener. Try watering the lawn instead.

Just in case you were wondering if the government was actually more concerned about American citizens or its banker friends around the world:

In a change from the original proposal sent to Capitol Hill, foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout, according to the fine print of an administration statement Saturday night. The theory, according to a participant in the negotiations, is that if the goal is to solve a liquidity crisis, it makes no sense to exclude banks that do a lot of lending in the United States. Treasury Secretary Henry Paulson confirmed the change on ABC’s “This Week,” telling George Stephanopoulos, calling the coverage of foreign-based banks “a distinction without a difference to the American people.”

The financial community didn’t want to take its medicine back in 1999, so they put it off. Now they’re facing amputation, so they’re putting it off again. In the long run, they’re dead, of course, the problem is that each purchase of time to benefit the financial elite costs the American people dearly.

None of this is actually necessary. It’s only necessary in order to preserve the Federal Reserve’s failing monopoly over US money. Back when there were hundreds of competing bank currencies, a bank failure meant that those who held its currency suffered. Now that there’s a government-granted monopoly, a failure means that everyone will suffer. The fact that centralized money operates no better than centralized anything else should not surprise anyone capable of understanding the supply-demand curve.

UPDATE – Even the Washington Post recognizes that this preemptive bailout scheme is an insane idea likely to cause more problems than it solves:“With truly extraordinary speed, opinion has swung behind the radical idea that the government should commit hundreds of billions in taxpayer money to purchasing dud loans from banks that aren’t actually insolvent. As recently as a week ago, no public official had even mentioned this option. Now the Treasury, the Fed and congressional leaders are promising its enactment within days. The scheme has gone from invisibility to inevitability in the blink of an eye. This is extremely dangerous.”

UPDATE II – As you’d expect, Ron Paul is one of the few politicians who actually understands what’s going on and what should be done:

What’s your take on this huge financial bailout?

“It’s more of the same. More debt and more inflation and more pressure on the dollar. Ultimately, although the markets are responding very favorably at the moment, I think it is going to be devastating to the dollar and to our financial situation in this country.”

So instead of having taxpayers buy the bad debt, the market should take care of it by itself?

“Sure, prices need to go down. Bad debt needs to be eliminated. The taxpayer ought to be protected. Taxes ought to be lowered…We are following the same routine that we did in the Depression, and that is artificially try to keep prices up. People were starving in the Depression and the only thing they did was try to keep wages artificially high and keep food prices high. We are doing the same thing now—we are trying to keep housing prices high. Low prices for houses mean poor people could buy a house. This is the most important part of a free market economy and that is free market pricing. Without free market pricing, the market can’t work. And this is in a way a major effort to price fix.”

They can fight economic gravity as hard as they want. But in the end, the plane is eventually going to run out of fuel and the landing will be a lot harder as a result. I don’t have much sympathy for a country who rejected the chance to have Ron Paul at the helm and favored the likes of McCain and Obama.

86 Burns Redbeards (2-0-0)
65 Black Mouth Curs (0-2-0)

78 Alamo City Spartans (2-0-0)
70 Silver Spooners (0-1-1)

73 Valders Valkyries (2-0-0)
55 Judean Peoples Front (1-1-0)

82 Masonville Marauders (1-1-0)
80 Winston Reverends (0-2-0)

67 Mounds View Meerkats (1-1-0)
37 Greenfield Grizzlies (0-1-1)

Nate asked me what I think about the apparent end of the Tarvaris Jackson Experiment. Well, I think it’s long overdue, I wanted the Vikings to pursue Drew Brees back when San Diego decided to go with Rivers, and that the Vikings should now aggressively pursue signing either Jeff Garcia or Daunte Culpepper. Both quarterbacks, despite their limitations, are much likelier to be effective than Jackson or Gus Frerotte can be, and Garcia probably even knows a fair amount of Childress’s offense due to his time in Philadelphia. That being said, I’ll take Frerotte over Jackson without hesitating.

Jackson’s inability to develop into a serviceable quarterback, combined with the meltdowns of Vince Young and Michael Vick, demonstrate what anyone with a serious interest in the NFL knew all along; the supposed “reinvention” of the quarterback position was nothing more than a politically correct, media-driven attempt to support black quarterbacks. There’s no reason why a black quarterback can’t be as successful as a white one, as Culpepper, McNair, and McNabb have all shown. But those three quarterbacks were successful because they used their athletic ability as a last resort, not something they turned to the second they saw their first receiving option was covered. I suspect the NCAA move to spread offenses bears at least part of the blame for the amazing level of QB incompetence in the NFL.

NFL quarterbacking primarily concerns the art of the read, and the Tarvaris Jackson Experiment appears to show the limits of what one can be accomplished in three seasons with a committed coach, a strong arm, and a serious effort on the part of the quarterback. I quite like T-Jack as a player with physical talent who has really given it his best shot, and with his work ethic he’ll probably make for a reasonable backup. But he simply can’t see the field, read the defense, and find the open receiver in the very small amount of time provided by NFL defenses.

In other news, I’m kind of pleased about the Hochuli incident and not just because I don’t much like this San Diego team. NFL refs should be more inclined to swallow their whistles, as given the fact that perfection isn’t possible, they should referee the games in the full awareness that the game is not about them.

I’ll be shocked if the Vikings do well against the Panthers, as much as I like and admire the courage of Antoine Winfield, who has made two of the best solo tackles I have ever seen in the NFL, I hope they’re not going to let him go solo on Steve Smith. About the only hope for the Purple would appear to be possible overconfidence on Carolina’s part.

They totally know what they’re doing. They’re scientists, you see. And they’re ENTIRELY SURE they’re not going to melt the planet or anything while they’re smashing atoms:

The world’s biggest atom smasher, the Large Hadron Collider (LHC), has been badly damaged and will be out of commission for at least two months, scientists in Switzerland have admitted. CERN says that problems with its particle collider, which cost £3.6 billion, are worse than previously thought and that preparations for experiments will now have to be postponed….

They had planned to crash atoms inside the vast detectors of the LHC by sending two beams in opposite directions. James Gillies, spokesman for CERN – the European Organization for Nuclear Research – said this will now have to be put on hold indefinitely as experts try to solve the problem, which has been caused by a leak of helium in its 17 mile tunnel. In what is technically known as a “quench”, up to a tonne of supercooled helium escaped because of a faulty electrical connection between two magnets in the massive machine.

I’d feel much safer if it were Italian scientists messing around with trying to miniature black holes, to be honest.

Drudge on the Dow:

DOW UP 40 POINTS IN PAST MONTH… UP 18% PAST 5 YEARS… UP 44% PAST 10 YEARS…

In other words, stock market investors have made, on average, 3.2 percent per annum over the last five years and 4.4 percent over the last ten. That’s presumably before inflation and also ignores the fact that one-third of the stocks that made up the Dow of 1998 are no longer part of the Dow Jones Industrial Average.

Those who think that the stock market is always the safest investment should note that simply depositing one’s money in a Euro-denominated bank account since 2003 would have returned 8.5 percent per annum in currency appreciation plus interest without any of the inherent stock-related risk.

In case you’re interested, these are the companies that were part of the Dow Jones Industrial Average in 1998 that are no longer so: Chevron Corporation, Goodyear Tire & Rubber, Union Carbide, Sears Roebuck, AT&T Corporation, Eastman Kodak, International Paper Company, Altria Group (Phillip Morris) and Honeywell International. These declining companies were replaced by healthier, more growth-friendly corporations like the American International Group, which the keen-eyed reader may note has been occasionally in the news of late….