"That you may ruminate"

On an All-Bad Decision by Congress

Posted by Steve on September 28, 2008

The “Emergency Economic Stabilization Act of 2008” appears likely to pass, and that is a very, very, bad thing. The people of America are being put close to $700 billion further in debt in order to bail out elements of the financial sector that should instead have been hung out to die. Mark my words: there is nothing good about any bailout, including this one. “If you fuck up, you die,” is supposed to be the one iron-clad rule of life: that there is never a second chance, that there is never a margin for error, and if you can’t live your life flawlessly you suffer because any and every mistake you make can mean your ruin. Apparently, that’s not the case if you’re part of Wall Street. Thing is too, there’s no benefit from this. Catastrophic collapse of the financial sector (which isn’t happening – regional banks and financial institutions, which made sound lending decisions, are going gangbusters) is a good thing. The markets are friction loss in the engine of the economy: they drain a resource (money) without doing any productive work. Look at commodities markets: you’ve got oil well people and oil refinery people involved, who have a tie to the procurement, distribution, and use of the oil and thus a legitimate reason for being involved, and then you’ve got commodities investors who have no tie to the procurement, distribution, and use of oil, and thus no legitimate reason for being involved in the market. But they are, anyway, investing in oil futures. They’re nothing but middle-men, driving up the price without producing value. Cut them out of the process and they’re ruined, yes, but things improve for everyone else.

Hell, the touted “limits on executive compensation” don’t actually strip away golden parachutes or institute a salary cap on executives. They’re a sham, a facade of meaningful legislation. Full of sound and fury, signifying nothing.

There is nothing good about this legislation. It is all costs and no benefits, and it is likely going to pass.

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One Response to “On an All-Bad Decision by Congress”

  1. […] House of Representatives, I forgive the United States Congress for the Senate’s willingness to make a horrible decision. Although, I’m still angry about Division A, Section 129 of Consolidated Security, Disaster […]

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