On the bright side, at least he's not plagiarizing

In the midst of financial crisis frenzy, I missed this awesome story. Joe Biden said on TV that

"When the stock market crashed, Franklin D. Roosevelt got on the television and didn't just talk about the, you know, the princes of greed. He said, 'Look, here's what happened.'"

Of course, the market crashed in 1929, and FDR took office in January of 1933 and there wasn't any such thing as television then.

Maybe Joe can start claiming that he invented television.

Clear as Mudd

People are panicking and not getting their stories straight. Take Daniel H. Mudd, former CEO of Fannie Mae (I am not making this name up) for example. Here's his quote:

“Almost no one expected what was coming. It’s not fair to blame us for not predicting the unthinkable.“— Daniel H. Mudd, former chief executive, Fannie Mae.

and here's a paragraph from the NY Times story where the above quote was the lead:

"So Mr. Mudd made a fateful choice. Disregarding warnings from his managers that lenders were making too many loans that would never be repaid, he steered Fannie into more treacherous corners of the mortgage market, according to executives."

Oh my.

Here's another good one also from the above article:

"When the mortgage giant Fannie Mae recruited Daniel H. Mudd, he told a friend he wanted to work for an altruistic business."

and later in the same article:

"Mr. Mudd collected more than $10 million in his first four years at Fannie."


Why do I feel like J. Fred Muggs would have probably done a better job??

The best paragraphs I read this morning

or: Bill Easterly knocks it out of the park.

"Development economics still bears the scars of the Depression. A prominent World Bank Growth Commission concluded in May that "fast, sustained growth does not happen spontaneously. It requires a long-term commitment by a country's political leaders," and "each country has specific characteristics and historical experiences that must be reflected" in the leaders' "growth strategy." Some at the U.N. still recommend the discredited Big Push strategy of state-planned investment.

How much poverty has endured because individual entrepreneurs were shunned in favor of the likes of the $5 billion state-owned Ajaokuta Steel Mill in Nigeria, which never produced a bar of steel? Or because African governments spend their time preparing World Bank-required national Poverty Reduction Strategy Reports instead of freeing space for innovators?

We will never know. But we do know that the free market has a long-run track record of creating prosperity -- even with the occasional crash. The Depression's deceptive intellectual legacy is that development flows from all-knowing states rather than creative individuals. Here's hoping that the backlash to today's crash will not spawn another round of bad economics for the poor."

Can I get a Amen?

My faith in Congress is renewed

As a semi-professional cynic, I was happy, but stunned to see the House rise up and vote down the Paulson plan. Could it really be that they were looking out for the country?

However, we now know that they didn't defeat the Paulson plan the first time because it was bad, they defeated it because it was not bad enough! All it took was another 400+ pages of text and $150 billion of pork for pretty much the same bailout to sail through.

Tax breaks for producing wooden arrows? Really? That should start short term business lending flowing, no?

Anyway, I just want to thank the US Congress for not requiring me to change any of my deeply held views about it.

bailout views, and blues

Two quick shots, on the bailout...er...rescue.

First in the Charlotte Observer (and a lagniappe)


Then on the CBS station here in Raleigh

If Hank Paulson were a tiger cub

Is it better to take the wrong medicine than to take nothing at all?

When Mrs. Angus and I have to give pills to Mr. Pluto, we wrap them in cream cheese and toss them up in the air. He leaps up and grabs them and down the hatch they go. Our political elites must have been watching as the Hank n' Ben rescue plan, rejected once by the House has now been wrapped in $150 billion of lard and tossed back out for the House to swallow.

As many distinguished economists have pointed out, this plan (eloquently described by John Cochrane as the mother of all bailouts) simply does not address the core problems (lack of capital in some banks and lack of short term lending) in any kind of direct or efficient way. In my view, it aims to address bank capital problems indirectly by bailing out investors.

I think the crisis is real and something will have to be done. I also think in some sense the whole process of this legislation's (non) progress has contributed mightily to the uncertainty and downswing in the markets. Passing the bill might at least remove that source of uncertainty and maybe even raise confidence a bit. It also seems clear that, to Hank n' Ben, this is the only option. None of the other approaches suggested for re-capitalization appear to be on the table.

The above paragraph notwithstanding, I am still against the bill and hope it does not pass. I think the piecemeal approach we've used so far can continue to work for long enough that a more sensible re-capitalization scheme can be implemented. I do understand though Krugman's point that time is running out and maybe we need to do this plan to buy enough time to get a better plan (as bizarre and expensive as that sounds).

Retail politics comes to Chez Angus

Last night around 5:00 our doorbell rings. I go to answer and low and behold it's Wallace Collins at the door wearing a Wallace Collins shirt and carrying Wallace Collins campaign materials.

WC: "Hello, I'm Wallace Collins" (sticking out his hand for a shaking).

Me: (shaking said hand vigorously) "Yes sir, you sure are".

WC: (getting together a package of stuff from me) "I am running for re-....."

Me (interupting) "I should tell you sir that I am not a registered voter"

WC: "Would you like to become one right now?"

Me: "No sir, it's not by accident or laziness or anything, I just don't vote."

WC: ??????????????

Me: "Look at it this way, I definitely won't be voting against you".

WC: (very pleased with this spin) Well, OK then, have a good day.

Me: "Good luck with your campaign sir".


(ps. if you haven't clicked on the link in the first line of this post, let me assure you it's well worth doing so)

Proof that we need the bailout

People, I've been ranting against the Hank n' Ben bailout, cheering on the House for rejecting it, advocating a continuation of the case by case piecemeal approach.

I was wrong.

This morning new data has come to light and I've had to change my position to "Please save us Hank n' Ben!!"

A date with Maria Sharapova was auctioned off and the winning bid was $10,000. I am not making this up. We have a serious crisis situation people, right here right now. It's panic time.

Does this remind anyone else of a great episode of Arrested Development, or is it just me?

Student: Win, Teacher: Fail

In no way is #2 a Fail for the test taker. I would give full credit for noob as the opposite of pro, but deduct heavily for live as the opposite of death, ding for spelling on #3 and indecisiveness on #5. Maybe homeschooling is not such a bad idea after all.