Over in India, Satyameva Jayate debates the suggestion in Time Magazine whether we may be entering a â€œpost-modernâ€ era, where â€œâ€¦politics, something that we have assumed for 200 years was the wellspring of national success or failure, is somehow just not that important..â€
Itâ€™s a discussion about politics in Japan, where people have seen the election of four Prime Ministers in the past two years, but the article calls â€œremarkably well-governedâ€ because the professionalism of the so-called professional class, the bureaucrats who actually run the country.
Satyemva Jayate's analysis:
Might such a thing ever happen in India? I doubt itâ€¦
What would people say about the United States? Have the regulators, these so-called professional bureaucrats who work above the political fray handled the economy better than the political class?
We will soon find out. In the news, Congressional leaders claim they have finished work on the Wall Street Bailout Bill, an estimated $700 billion outlay intended to put an end to two weeks of turbulence in the United Stateâ€™s financial and credit sectors. The House of Representatives, where a potential rebellion of conservative Republicans may stall the proposalâ€™s passage, is due to vote Monday, Sept. 29. The Senate is scheduled to vote on the plan shortly thereafter.
In a country where political acronyms have become an artform, the 106-page bill creates another: TARP, the Troubled Asset Relief Program, interpreted by the Washington Post as:
â€œempower[ing] the [Treasury] secretary to buy “toxic” assets from financial institutions with taxpayer money. By removing such assets from the balance sheets of crippled companies, the bill's architects hope to reduce pressures on the credit market, thereby making it easier for Americans to get mortgages and other types of loans.â€
The Post story quotes Republican Senator Judd Gregg that once the plan jump starts the American economy, U.S. taxpayers will make money from the measure.
Ian Welsh from Fire Dog Lake in Australia has a great explainer on the components of the bill. Short take: 90 percent of the suck you were expecting.
A skeleton version of the long take:
- The $700 billion will be staggered, giving U.S. Treasury Secretary $350 upfront, another $350 released in January.
- No change in bankruptcy laws: â€œYes, banks will be helped not to go bankrupt, but if you go bankrupt judges won't be able to allow you to keep your house.”
– “Treasury to help people avoid foreclosures if it owns their mortgages.”
– “Treasury has the authority to issue insurance.”
– “If it doesn't pay back in 5 years, Treasury to levy fees on the financial industry to get the money back.”
Hereâ€™s his explainer:
…[W]hile this plan is an improvement on the original Paulson plan, which is saying, well, almost nothing. It's still a plan that, at the end of the day, won't work. That doesn't mean we won't see some short term benefits. Throw 700 billion bucks at the economy and the financial sector and it will do something. That's still a ton of money. But it won't fix the problem permanently, it will only patch it for a time and even during that time, things will continue to get worse. (For example, expect this to cause oil inflation.)
It's a bad plan that won't fix the economy or the financial sector. So we'll be revisiting this issue in 6 to 9 months or so when it becomes clear that the problem hasn't been solved, and that not solving it is costing a hell of a lot of money which could have been used to actually fix things.
With Congressional leaders — and presidential candidates — in both parties at least mildly supporting the bill, the odds are in favor of the bailout passing. Let's be snarky for a second and imagine what happens if it doesnâ€™t pass. Hereâ€™s an interesting explainer intended to counter the do-nothing rhetoric (let the cake-eaters eat cake?) coming from certain corners. But Katz, a commenter on the Australian blog Larvatus Prodeo is having none of that argument. Warning: upcoming War on Terror analogy.
Goldman Sachs and Morgan Stanley have proven the efficacy of suicide bombing.
â€œGive us what we want or weâ€™ll take all of you with us.â€
Memo to suicide bombers everywhere: you need bigger bombs.
So, where, exactly, is this bailout money going to come from? Darryl Mason writing in Your New Reality in Australia claims the buyers of American debt will be the very institutions who already own the country: The governments of Japan and China.
The message is clear. BushCo. will secure China's holdings of American debt, by staking the financial future, and health and education, of American children as collateral. Or China will drop the hammer. In case BushCo. didn't get the message, queen takes knight :
…The Federal Reserve and the Treasury do not really need to ride to the rescue of its debt-savaged financial institutions if only they really believed in their own shattered mantras of “Free Market Forever” and “Let The Market Decide.” China, the Saudis, the Russians are all eager to snap up some huge chunks of America at bargain basement prices. In a truly globalised, free market world, all these financial institutions should be up for sale to the highest bidder (with a few restrictions).
But they won't be doing that. So instead its a betrayal by BushCo. of almost everything principle claimed to stand for, and preached, and it's America Fleeced.
From Kuwait, Kill That Damn Patient, has a second option: buy up toxic debt through legalizing marijuana. Before you spill your bong water, wait. It makes medical sense — the author works in hospital — and legal marijuana will certainly help patients by creating mass markets for less expensive, natural pain relief. The economic benefits are obvious:
…[Y]ou see weed is (for the time being and for a long time coming) considered an illegal substance which may be harmful and because itâ€™s an illegal substance law enforcers have to find the people who trade in it and erm â€¦. arrest them.
Hiring people to do this costs money â€¦. about $34,433,700,162 (this figure is the amount of money spent on the war on drugs, not weed specifically) a fair portion (about 7.7 billion annually) of which could have been put to better use.
Legalizing weed would also bring in an estimated 6.2 billion in tax revenue (raking in a grand total of 13.9 billion); it would also mean that organised crime would loose a fair chunk of their cash-flow (and for that matter so would big tobacco).