Ladies & gentlemen, it gives me immense pleasure to inform you (in case you've been busy with something interesting, presumably!) that no news channels or wires will, henceforth, be speculating about the nationalization of Citigroup, Vikram Pandit's home and his underwear. For crying it out loud, it was already done; and they just made it official yesterday evening. And with that, the glorious business of America (Which was business) has now officially become government business!
I, for one, am more than just plain happy to be rid of making fine distinctions between bouts of verbal gymnastics / semantic contortions / what-have-you, in relation to nationalization. Nonetheless, the chain of events over the last 3 months since Obama's anointment as the new messiah for change-we-can-believe-in, still leaves me very worried. And I suspect at least every seventh person in the world (I am reliably informed that five-sevenths of the world doesn't understand American politics and/or business, and one-seventh is too stoned to care!) would know why.
For starters, consider this about the Obama rescue plan: it plans to rescue indebted Americans from hyper-leverage by offering them more debt! How does that sound to the lay person on the street? It would have been bad enough if this was all there was to the whole sorry business. Now, those banks that had conveniently hidden away their exposures to "Special Investment Vehicles" & "Off-Balance Sheet Liabilities" are about to be rescued by becoming the government's SIVs & OBLs. Give me a break, guys!
I wonder if the world would have been a better place if the American govt had just told the world that they were about to fund construction of houses for every single citizen, and just have distributed them for free, in proportion to family size & income. At least, the whole sorry business about buying toys (with suspected carcinogenic effects) from China & clothes (that bleed colors) from India, on the basis of some imagined home equity, wouldn't have been needed.
Maybe, the US Congress is just sticking its tongue out to the erstwhile USSR & to China....See, we're eventually going to turn socialist / communist, after having convinced you poor sods that free markets were the way to go!! Oh & Mr Brown, we're speaking on your behalf as well. Thank you all very much for being such an appreciative audience. The show's over now; would you pls donate a few gold bricks on your way out?
The second part of the rescue plan hinges on a seriously unhinged stimulus. A stimulus which, among other things, plans to "Make Work Pay". What?? Seriously, WHAT?!?!? Doesn't it already pay? Shovel-ready projects, you say! Anyone with a shovel could get ready with a project...who knows, Ms Palin might just change her mind about the Bridge to Nowhere, and presto, you have another shovel-ready project! I could spend ages discussing the merits of transportation projects relative to investments in power grids & water supply, with regard to employment creation & their stand-alone contribution to GDP growth. I could also spend ages discussing the relative merits of toll-financed projects vis-a-vis tax-financed projects (which appears to be the clear intention of the messiah's regime, down the line!!). I suspect it would suffice to say that the current inclination is to evaluate the feasibility of an infrastructure project on a stand-alone basis, instead of an evaluation within the framework of a holistic plan. Disheartening stuff, really!
And this coming from the man who clearly had a better grasp of economic issues, when evaluated prior to the Nov elections. Now, then, what would Mr McCain have done? OMG, let's not even venture there!
p.s :- You ask why one-seventh of the world & not one-fifth? Oh, well...the thing is, 98.674% of statistics are made up on the spot!
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Interesting blog....And as I have listened and read about all the views on America turning "socialist", I cannot understand what the great hue and cry is all about...Its at the end of the day a policy decision...and as a Wall Street article pointed out, Ronald Reagan thought the government was a problem...Obama thinks the government is the solution....Maybe that solution involves nationalization of banks..and putting into place shovel ready projects..or making work pay....so be it....we will all see how it goes....and there will be a plethora of economists supporting these or raving against these...have we ever cared before?
ReplyDeleteAs i have watched Oabama supporters dance in African nations, I have always wondered if he is a messiah for the US or for the world...He is an American president...And if George Bush never got the tag for "leading US (not the United States but us)", so should not Obama...simply because he inherits the same mantle that Bush did...A global economy should not make us dependent on US businesses alone...Maybe this is a start...Cheers!!..;))