Friday, January 25, 2008

Government Bailouts - Why the Heck Not?

Today was the second day in a row that Patriots Quarterback Tom Brady was not seen during the teams practice that was open to the media. I still think the ankle issue is bogus and even if it were somewhat serious, Brady has plenty of time to get ready for the Superbowl. Do I sound worried?

A Economic Disconnect Plant at Yahoo Finance?
I read an article today on Yahoo Finance that seems like a genuine piece, but it is dripping with sarcasm, my favorite literary device! Check out an excerpt:
AP
Consumers at Heart of Stimulus Plan
Friday January 25, 5:14 pm ET By Christopher Leonard, AP Business Writer
At the Center of the Stimulus Plan: Consumers Debating How to Spend Their Windfall
ST. LOUIS (AP) -- The success of the federal $150 billion emergency economic stimulus plan will hinge on whether American consumers do what they do best -- spend, spend, spend.
The stimulus has been debated in Washington for more than a week as the economic outlook worsened, and now Americans are armed with specifics: Individuals will get up to $600, working couples $1,200 and those with children $300 more per child.

President Bush and leaders in Congress hope people will spend those rebates -- a flat-screen television, maybe, or a trip to Disneyland -- to help revive an economy sagging from bad mortgage lending and a lack of confidence in the stock market.
One problem: The spending habits of Americans, many of whom used the rising value of their homes during the real-estate boom like a piggy bank, may be changing as housing prices tumble and credit dries up.
So many consumers, like Jennifer Galligos of St. Louis, may put the money into savings or use it to pay down debt instead. The 24-year-old accountant is married and has a 5-year-old son, so she and her husband could get up to $1,500 in rebate money.
"I'd probably put something like that in a CD or another investment," Galligos said during her lunch break Friday. "It's not often that I get a chance to save something."

In Salt Lake City, Munn Powell is used to funding a family of six on a bit of an economic roller coaster. A self-employed videographer, his income varies yearly and usually drops when times get tough.
"After 9-11, it was a measurable drop," said Munn, 37, who's a father to 3-year-old twins, a 6-year-old boy and an 8-year-old girl.
Under the Bush stimulus plan, the family would qualify for about $2,400. Munn says he hasn't discussed a possible rebate with his wife of 12 years, Cristy, but said the family has a fairly set financial plan.
"I imagine we'd be somewhat conservative with any little windfall," said Munn, who just finished a spending splurge remodeling his basement. "Honestly, it's probably going to back into our reserves. That's probably not what Bush is hoping for."

Honestly, this piece is far better than anything I have ever written! The thing is just jamming home many points discussed here and provides real world commentary for comedic support. The "spend, spend, spend" quip was priceless. The author covers the great amount of thought put into the plan by mentioning the ENTIRE WEEK the ,ahem, best and brightest spent debating. Anyone want to lay odds the young woman named Jennifer never,ever puts any money into a CD at any time? I mean someone that hardly ever has the chance to save anything at all is unlikely to start here. I absolutely love the guy at the end of the piece! Get this part again: "Munn says he hasn't discussed a possible rebate with his wife of 12 years, Cristy"! He probably doesn't want her to know anything about it. While Munn thinks he will be conservative with the newfound cash, he just blew a wad of coin remodelling the basement! Too funny.

This article by Christopher Leonard (my new favorite writer) could easily be a stealth takeover of the press by the financially frustrated. I love this article with all my heart. At the end we also get a possible liberal rally cry "Do not spend the rebate, George Bush wants you to!".

Government Bailouts - Why the Heck Not?
I admit that I am opposed to any and all government bailouts. I think I am that way because basically I hate government handling of anything, and I am never in need of a bailout personally. It seems that the feeling in the capital is that Wall Street, the consumer, and home buyers of the last 4 years need a "Hand Up" to get through this mess. What they really are getting is a "Hand Out", but whatever. The Stimulus plan, raising the FNM limits to $750k with full backing of the US, The Hope Now Plan, Monoline insurance takeover, FED lending to banks without end, etc. Quite an impressive list of obligations!

With an eye on my bias, I thought a bit about bailouts and may have changed my mind. The following is a list of proposed bailouts that the government should seriously consider getting in on while they are in a self destroying mood:
  1. Loan Shark Reserve Insurance - You know making money in the underground economy is not easy. By definition ALL of your clients are Subprime Slime. Often, not even a broken leg or a cracked cranium can get a deadbeat to pay his marker. At times like this, street credit contracts, and you get loan shark deflation. This is extremely dangerous because the cost of credit goes way up, and people can face some brutal terms. The government should institute a plan to have cash reserves available to these underworld banks. Only the full backing of the US Treasury can ensure a smooth stream of funds to the strapped true lenders of last resort.
  2. Terrible Movie Reimbursement Plan - You know the feeling. The trailer looked great. The film had actors you like very much. The storyline seemed interesting. You plunk down your hard earned $20 dollars for two tickets at the theater and two hours later you feel like you were mugged. The movie was terrible, beyond redemption. You are left with an empty feeling, and an empty wallet. Someone has to pay, right? Well step right up to the office of Bad Film Refunds and get your money back! No longer will a poor movie choice be forced fed to the public. The US treasury will put funds in a secure "lockbox" and will distribute the money after a bad experience. Where were they when I saw "Waterworld"? Kevin Costner, how could you?
  3. Predatory Bartender Protection Plan - You have been there before. It is Friday night and you and the boys are going to go out for a "little while" and have a few drinks to end the week and get some time away from the Wife/girlfriend. You have every intention of having a few beers, talking sports, and getting caught up on the lives of your friends. All would be ok if not for the lurking "Predatory Bartenders". Their sole purpose is to get you and your friends inebriated, and separate you from your cash. Often times they are cute females that just so happen to be single and think you are so very funny. When you stumble on home after close, you get an earful. What is worse is sometime during all the fun, you blew through over $200 dollars! Again, not your fault here. The bartenders are using a substance called alcohol to lower your inhibitions and make you spend your money. The US government has a simple form to fill out and your basically stolen cash will be returned. The plan exempts money blown by going to strip club after the bar and blowing more cash there as this could be a moral hazard.

There are three plans I think the government should jump in on. It could only help people, and that is the business of the government, right?

Friday night and it is Rock Blogging Time!

Ozzy with "No More Tears". Thunderous Bass line and the lead guitar is strung heavy for a deep tone. In my opionion Ozzy's last great song:

Confederate Railroad with the classic "I Like My Women a Little on the Trashy Side". Great Lyrics include "pardon us son, she aint no kid, thats a cocktail waitress in a dolly parton wig!":

Anthrax with "Black Lodge". A truly great song that I had forgotten about until I heard it today for the first time in 5 years! The "Sound of White Noise" album is excellent as well:

Have a good night.

7 comments:

watchtower said...

It's our patriotic duty to spend.

Anonymous said...

To bad that guy didn't interview a gold bug and ask him/her what they were going to do with it:-)

Kevin

Anonymous said...

Anyone else have a bad feeling about this? I mean impending doom sorta feeling?

G

Have a good weekend everyone.

Anonymous said...

G

For me the feeling of impending doom always came on the Sunday night after a week or so off from work and knowing I had to go back on Monday. Being I don't work any more at least of a corporation now it's when I have to go for a doctor appointment. One never knows does one?

There are more things that life is about then just money. I'm looking forward to spring and planting a garden along with maybe raising a couple of cows.

I should have a new grandson any day now so I'm not all that gloomy and my wife is ecstatic.

Kevin

Anonymous said...

My new grandson arrived at 9:01 this AM in good health and my daughter is doing fine as well.

Kevin

watchtower said...

@ Kevin
Congratulations on your new grandson! I`m glad mother and son are doing well.

getyourselfconnected said...

Excellent news Kevin! Glad all went well on the new addition.
AnonG, sorry the work deal did not work out, but your attitude is the correct one. Be gracious and interested in other spots and they will remember that.
Thanks to all for stopping by.