Moral hazard alive and well

JJ is still having problems accessing the blog.  So here is one for today (sorry about yesterday).  Those in the large banks are making record salaries this year after a record-breaking last year. See here.  Do you really believe they are being paid the value of their marginal product or is this looting as a result of moral hazard?

Money for nothing

This is a lovely article:

http://finance.fortune.cnn.com/2011/01/30/money-for-nothing-at-goldman/

This is absolutely the job I need to have. The very first paragraph says it all. It is clear that Goldman has not learned anything from the financial crisis. Except how to take advantage of the rules for their benefit. In some respects, I blame the government for thinking that the new rules would change the behavior that is so engrained on Wall St. It just seems too easy for these companies to find ways around regulation. It also seems that anytime some piece of solid legislation is introduced, these companies lobby hard against it, and eventually get their way. So I ask; Who is really running our government? Because I am sure that this behavior is pervasive at every level of government in this country.

Well there's your problem!.....

This article exposes some reasons as to why we have a painfully ineffiecient government.
http://politicalticker.blogs.cnn.com/2011/01/28/koch-weekend-meeting-fires-up-debate-over-politics-influence/

It seems like there should be some sort of law regulating these types of get-togethers. I have a problem with secret meetings that can influence political decision making. I mean, what are they going to do with 2 billion dollars that they cant do with 1? It just feels sleazy, and stunningly arrogant. Maybe I am over reacting, but I have a very hard time believing that these people have my best interests in mind during these meetings. Mr. Cantor or any other politician should not be allowed to participate in these types of meetings. Just the mere possibility of impropriety should have no place in politics, but I guess if I want things to change, I better win the lotto.

Sorry this was late today, I was on dad duty this morning!

Choices are difficult

Quarterly GDP figures came out this week for the UK and the US.  Our GDP grew--not a lot but still enough to show that the economy is improving.  Their GDP fell.  The British equivalent of the Tea Party took over last year and imposed an austerity budget.  Was it the right thing to do?  What comes next?  This editorial in the Financial Times does a nice job of highlighting the public and private choices that will need to be made.  I can almost see possible paths to various points on their production possibilities frontier. 

We have to take responsibility

See this article: http://www.cnn.com/2011/OPINION/01/27/borger.obama.deficit/index.html

The first two paragraphs really hit home for me. Especially this part: " any pollster will tell you that while people always say they want the deficit fixed, they never believe they're part of the problem. So they won't hear of reducing Medicare and Social Security, which amount to nearly a third of the domestic budget. That kinda rules out any serious discussion." It suggests that as Americans, we are only interested in solving our deficit problem if it is done at the expense of others. Its kind of like the prison dilemma: A lot of folks think we need newer, better prisons, as long as they arent in their hometowns and they dont have to pay for it. We have passed the buck far too often in this country and that attitude has become central to the problem at hand. Its easy to lecture others on what they need to do to fix the deficit problem, its quite another to admit that they are just as much to blame, and accept that they have to make sacrifices too. Government needs to quit wasting time and accept that there is NO good answer. Fixing the deficit will be painful, but necessary. Just like a root canal. It sucks, nobody wants one, but in the end you have to do it, you deal with the pain and move on.

You'll love this one.......

Please read this article http://money.cnn.com/2011/01/26/news/economy/tea_party_budget/index.htm?hpt=T2

Now that your nausea has passed, we can discuss.

I have yet to hear either of them say what this will do to help America. It will lower the deficit. Great. So we will have a generation of people that are ill prepared for the real world? But they won't have national debt to worry about so it's ok. How about housing? Apparently it wont need to be affordable since there won't be a national debt anymore, so it's ok. You know, because the people who truly need help buying a house really care that we have a huge national debt.

Bachmann would replace farm subsidies with farmer savings accounts(whatever that means), ELIMINATE or dramatically scale back the Department of Education to save $29 billion or $31 billion( yeah, that seems worth it, and those almost mean the same thing) and slash programs at the Department of Justice ($7.8 billion).

She would also cap Veterans Affairs health care spending (I'm sure this will go over quite well with all of our servicemen who are being shot at overseas), privatize the Transportation Safety Administration(Im all for this if they won't grab my junk), Federal Aviation Administration and Amtrak, repeal the Dodd-Frank Wall Street reform law(c'mon, we all know that there is absolutely nothing wrong with Wall St.), and open the Arctic National Wildlife Refuge to leasing(Drill baby drill!).

I'll just open this one up for comments. Maybe I am overreacting to these proposals, but these two seem awfully jaded.

Your State of the Union Address

I dont know how many of you watched the State of the Union speech last night. It was hard to miss since it was on every channel anyway. So, here we go again. Calls for bi-partisanship, and collaboration on policy were made as usual, as well as the bold predictions for what we should be to the world in the future. But what about right now? Obama called for a 5-year freeze on non-defense spending (a drop in the bucket compared to actual defense spending), and an increase in education and clean energy spending. "At the same time, Obama proposed reforming how government spends and works, including the five-year freeze on non-security discretionary spending, eliminating earmarks from spending bills and reforming the corporate tax code to remove costly loopholes and subsidies, with the savings lowering the corporate tax rate." These are all things we have heard before. Obama also said "We are poised for progress," two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again." My wallet would disagree.
I also found it interesting that his calls for professional unity were lauded until the cameras went off, then it was back to kindergarten politics with staffers calling GOP plans the "meat ax" approach, and Republicans basically saying they don't care what the President says their ideas are better. They all sound like my kids fighting over who colors better.
I wasn't a fan of Boehner's tie either (totally irrevlevant, but it needed to be said)

If there were no cameras, CNN, or rebuttals. No fake smiles and ovations. If you were giving the state of the union speech, what would you say?