Tuesday, September 30, 2008

Running on Empty

I am against the Bail Out.

And I'll tell you why. If somebody asks me for $700 Billion they better be able to articulate to me why they need it, what they are going to do with it, how they are going to pay it back, and (very importantly) why they are asking ME.

I have been paying as much attention to this fiasco as any other average citizen, and I have not heard a rational explanation of why this . . . whatever it is . . . is necessary.

No explanation = no money.

What I am able to glean is that over the past several years our financial system has veered into excessive risk taking through 2 channels, i) lowering standards for evaluating borrower's creditworthiness, and ii) lenders using imprudently high leverage to increase profits. So, now that the chickens have come home to roost (ha ha), we are seeing the 2 inevitable results, i) bad borrowers defaulting on their loans, and ii) over-leveraged lenders unable to withstand rising defaults on their portfolios because of their paper thin balance sheets.

I know it's more complicated than that. But I'm not a PhD and I don't have the time, or the ability, to spend trying to educate myself now when Hank Paulson and Ben Bernanke are screaming that they need this money like yesterday. The hurry! hurry! hurry! of it all reminds me of being on a sales tour at a timeshare resort. So my instinct is to keep my wallet in my pants. (That's good advice generally, btw.)

Well, I found a smart guy who has articulated my feelings on the matter, Jeffrey A. Miron, an economist at Harvard. He explains why he's against the Bail Out in a short and easily readable opinion piece HERE at CNN.com.


Lehman's Brother - Cooper Lehman

Meanwhile, back on Main Street:

Wall Street may be out of money, but Atlanta is out of gas.

At least we all get along here

There is no gas here. All of the gas stations have plastic bags over the handles of their pumps to signal that they are empty. Why? Because Texas had a big storm. Sighhhhhhh. Put two oil geniuses in the White House and what do we get? No redundancy in our vital infrastructure. Rumor is that the Port Arthur refinery is still not working because there is no electrical power to it. Can that be true? A refinery that doesn't have it's own generators? Talk about poor defense planning.

In the category of counting the glass half full, having no gas has gotten people to stop complaining about how much it costs once they are able to find some.


Of course, we Georgians are still running out of drinking water, but we've suspended our fretting about that to deal with this more imminent crisis of not being able to get to the grocery store.

Lake Lanier - Atlanta's Water Supply

I can't wait for the weekend.