INTERESTING: Moral Hazard

Monday, August 9, 2010

http://cafehayek.com/2010/08/successful-bailout.html

Successful Bailout? by Don Boudreaux on August 2, 2010

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Second – and more importantly – the chief economic case against the bailout was not that huge infusions of taxpayer funds and special exemptions from bankruptcy rules could not make G.M. and Chrysler profitable. Of course they could. Instead, the heart of the case against the bailout is that it saps the life-blood of entrepreneurial capitalism. The bailout reinforces the debilitating precedent of protecting firms deemed ‘too big to fail.’ Capital and other resources are thus kept glued by politics to familiar lines of production, thus impeding entrepreneurial initiative that would have otherwise redeployed these resources into newer, more-dynamic, and more productive industries.

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“The broken window fallacy”
— Frédéric Bastiat Ce qu’on voit et ce qu’on ne voit pas (That Which Is Seen and That Which Is Unseen) 1850

I know for certain that the 5k$ that Obama robbed from my wife’s IRA could have been used to do something she wanted to do. Even if the bankruptcy only gave her a dollar, it was still HER dollar; not his!

Seizure by the Gooferment. Worked for FDR; worked for Obama. I won’t forget it either.

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RANT: Bailouts are welfare and theft is just theft

Monday, July 19, 2010

http://irisheagle.blogspot.com/2010/07/mortgage-bail-out-recipients-should-be.html

Saturday, July 10, 2010
Mortgage bail-out recipients should be publicly named

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I also have sympathy for those who find themselves out of work and can’t afford their mortgage, but again I would like any help that we taxpayers are to provide …

*** end quote ***

Welfare is welfare. Theft is theft. And, there’s a “moral hazard” in this.

When the Gooferment takes over, “We, The Taxpayers” don’t get to decide who gets our charity and who doesn’t. Who’s worthwhile and who’s a bum! And, from thence all sorts of bad things come.

It’s welfare. Just more welfare. That enables bad behavior. Bad behavior on the part of the recipient, every one who knows about it, the politicians, and the bureaucrats. The recipient is not “encouraged” to make better decisions. Every one, who knows about it, takes on more risks “knowing” that “We, The Taxpayer” will chip in to our hard luck story. The politicians get to claim that they “care” — easy to care sending OPM Other People’s Money — while having favors, contracts, and jobs to dispense. And, last but not least, the bureaucrats can have high paying jobs with pensions while doing “good for the downtrodden”. Argh!

It’s welfare. It’s theft. And, it encourages future bad behaviors that we can only imagine.

To misquote the iconic Nike commercial, and to quote the stupid anti–drug one, “Just Say No”.

No Taxpayer-funded bailouts of any kind. Ever. No matter how sad the tale.

If the politicians want to pass the collection basket after putting in a few quid of their own, I’m happy to contribute. Just don’t rob me and expect me to be happy that the thief is doing good with my few scarce pennies.

Argh!

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GOVEROTRAGEOUS: The Gooferment doesn’t learn from history

Tuesday, July 6, 2010

http://opinion.financialpost.com/2010/06/25/lawrence-solomon-avertible-catastrophe/#ixzz0s9jeLCy7

Avertible catastrophe
Lawrence Solomon
June 25, 2010 – 9:06 pm
The BP oil-rig explosion. The U.S. turned down an offer of Dutch technology that might have reduced the spill’s impact.
How U.S. labour and ­environmental rules blocked Dutch spill-cleanup technology

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Then again, perhaps he should not be all that perplexed at the American tolerance for turning an accident into a catastrophe. When the Exxon Valdez oil tanker accident occurred off the coast of Alaska in 1989, a Dutch team with clean-up equipment flew in to Anchorage airport to offer their help. To their amazement, they were rebuffed and told to go home with their equipment. The Exxon Valdez became the biggest oil spill disaster in U.S. history — until the BP Gulf spill.

*** end quote ***

It just proves that the Gooferment is stupid!

And, we are just a dumb for believing their illusions and promises.

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INTERESTING: Time to nuke Freddy and Fannie!

Thursday, July 1, 2010

http://online.wsj.com/article/SB10001424052748703513604575310383542102668.html?mod=WSJ_hps_sections_realestate

http://goo.gl/O4AQ

CAPITALJUNE 17, 2010
Rethinking Part of the American Dream
By DAVID WESSEL

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In hard-hit Las Vegas, nearly 59% of households own their homes, but only 15% to 19% of households own a home in which they have any equity left.

For many, the American dream of home ownership turned into a nightmare of debt and foreclosure. Some people should rent.

As late as the 1930s, a U.S. mortgage was generally a loan for three to five years, at which time the borrower had to pay it off. Then the government fostered the 15-year fixed-rate mortgage—and eventually the 30—and the concept that the homeowner would pay off principal in monthly installments.

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Argh!

Several thoughts occur to me here:

① 15 to 20% of homes left with the owners having equity? All those senior citizens who bought retirement homes? That’s astounding.

② Talk about malinvestment. (That’s Austrian economics term. See below.) Detroit, Flint, and Gary are destroying houses to avoid providing gooferment services. We as a society have our wealth destroyed by such action. Are there no homeles there?

③ It would seem that the FTC and the TREASURY / FED / SEC could stop this disaster anytime they want to. Regulations of minimum down payment like stock margins. Rules about honest disclosure. Limits on what banks can resell as “securities”. AND, the biggest rule, the originator get stuck with defaults! No more package it and forget it. (But then we’d see just how crappy the economy is. And, how many banks would be insolvent. It’s in the Gooferment’s interest to keep putting lipstick on the is pig. Pucker up! Guess who’s going ot have to kiss it?

④ I remember reading that Freddy and Fannie make the economy more uncompetitive and more “rigid” in that owning a home meant the workforce could not adapt to new opportunities in new locations. A high percentage of folks renting means they can move more quickly. Didn’t the Mayans force migrations by burning the village and forcing them to move hundreds of miles? Is this our modern equvalent?

⑤ Speaking of Freddy and Fannie, I see where bailing them out is going to be the “mother of all bailouts”. Shouldn’t we put them out of their, and our, misery? Time for a Constitutional Amendment banning all GSEs! (Gooferment Sponsored Entities)

⑥ Why don’t we bring back the 30 year Treasury Bond as a method of financing the deficit and easing the pain we are facing? Or is the GOoferment afraid of what that 30 year rate will be?

⑦ On HGTV, there are a lot of home buyers, some first timers, who are buying big ticket homes with nearly nothing down. Several hundred thousand dollar mortgages and they need “mortgage assistance”, seller paid closing costs, and even the tax credits to make the numbers work at all. And, in the cases of two income “families” (i.e., DINKs), one paycheck is completely going to the mortgage. Isn’t that a recipe for default in a job loss scenario?

⑧ Perhaps, it’s time for multi-generational households (i.e., grandma and grandpa buy with their retirement money; mom, dad, and the grandkids bunk in)? Wasn’t that the model before Social Security allowed Grandparents to escape to Florida? Makes the Grandparent able to dodge the nursing home.

⑨ Interesting that the Wall Street Journal paywall isn’t very encompassing.

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http://en.wikipedia.org/wiki/Malinvestment

“Panics do not destroy capital; they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.”

— John Mills, December 11, 1867, on Credit Cycles and the Origin of Commercial Panics

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RANT: ‘Beach House Bailout’

Tuesday, June 15, 2010

http://www.wnd.com/index.php?fa=PAGE.view&pageId=165701

OBAMA WATCH CENTRAL
Is insurance industry next takeover target?
Proposal in Congress puts feds in middle of catastrophe claims
Posted: June 12, 2010 9:10 pm Eastern
By Bob Unruh

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“The ‘Homeowners’ Defense Act,’ H.R. 2555, dubbed the ‘Beach House Bailout,’ requires taxpayers across the country, and in your district, to subsidize insurance for wealthy homeowners along the Florida coastline,” the letter to members of Congress said. “The bill is structured to assist the state of Florida (and to a much smaller extent, California) through federal assistance.”

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Never mind take over, who wants to subsidize rich people on the Florida coast in mansions?

Let Donald, Rush, and whomever fund their own risks!

As a matter of fact, why is the gooferment involved in “insuring” floods any way?

Can you spell ‘moral hazard’?

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POLITICS: The attempt to have welfare and warfare destroys us; just like LBJ did

Saturday, September 19, 2009

http://www.ocregister.com/articles/obama-missile-defense-2572467-nuclear-iran

Friday, September 18, 2009
Mark Steyn: Obama helping Putin restitch Iron Curtain
Scrapping of U.S. missile defense plans hands big victory to Russia’s new czar.
Mark Steyn
Syndicated columnist

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In a sense, the health care debate and the foreign policy debacle are two sides of the same coin: For Britain and other great powers, the decision to build a hugely expensive welfare state at home entailed inevitably a long retreat from responsibilities abroad, with a thousand small betrayals of peripheral allies along the way. A few years ago, the great scholar Bernard Lewis warned, during the debate on withdrawal from Iraq, that America risked being seen as “harmless as an enemy and treacherous as a friend.” In Moscow and Tehran, on the one hand, and Warsaw and Prague, on the other, they’re drawing their own conclusions.

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Don’t you wonder how this one action is going to hurt our ability to be safe in the future?

If I was a foreign country, I wouldn’t trust us.

Would you?

We are clearly untrustworthy. And, we, the dollar, and the world will suffer from our failure.

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POLITICAL: It’s the gooferment!

Monday, August 31, 2009

http://www.lewrockwell.com/kwiatkowski/kwiatkowski236.html

Health Care Through Central Planning: A Helpful Analogy
by Karen Kwiatkowski

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We have examples – ophthalmology and veterinarian services come to mind first. You can get an eye exam for $50, and then order glasses online for another $20. Overall, that’s less than a pair of running shoes, or a meal out with the family at Applebee’s. The wide variety of eye surgeries available and the competitive and safe nature of these surgeries speak to the working of a freer market than what we see for the rest of our health care. The argument by the statist left and statist right is falsely premised by the idea that the current health care “system” is a free market system, and based on the ideas that free market systems can’t work for health care because people are not all equal in either health, desires for health or finances.

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We have to keep hitting the gooferment on all fronts. It’s ineffective, inefficient, and screws up everything it touches!

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