If the Government Built Cars

Michael Moore told Larry King this:

In an interview Wednesday with CNN's Larry King, Moore criticized the automakers for ignoring the desires of consumers, building instead bigger, more profitable cars as foreign automakers pursued both SUVs and more fuel-efficient sedans and compacts.

Moore suggested that Congress demand change in exchange for the money, including a call to help rebuild mass transit in the country.

"President-Elect Obama has to say to them, yes, we're going to use this money to save these jobs, but we're not going to build these gas-guzzling, unsafe vehicles any longer," Moore said. "We're going to put the companies into some sort of receivership and we, the government, are going to hold the reins on these companies. They're to build mass transit. They're to build hybrid cars. They're to build cars that use little or no gasoline."

What would such a Congress-mandated car look like? Why, the Pelosi GTxi SS/Rt Sport Edition!

So take the bus to your local CM dealer today and find out why the Pelosi GTxi SS/Rt Sport Edition is the only car endorsed by President Barack Obama. One test drive will convince you that you'd choose it over the import brands. Even if they were still legal.

Getting a Job in a Growth Industry During an Obama Administration

"In Lower Manhattan, the line for an Internal Revenue Service open house began forming an hour before the event and would eventually wrap around the block. "

The I.R.S. dangled the possibilities when it held an open house at the federal office building at 290 Broadway in Lower Manhattan on Tuesday. An hour before the fair was scheduled to begin, the crowd began lining up — recently laid-off Wall Street types in charcoal-gray pinstripe suits and trench coats; less formally dressed people; a woman with a new accounting degree on her résumé and a 14-month-old baby in a stroller...
...
Some job-seekers said they were casualties of the financial meltdown. Jean Delice had already been laid off as a computer engineering specialist at Lehman Brothers when the firm, as he put it, “hit the rocks.” He said that the firm’s demise had cost him “everything,” including his severance package, and that the long-term prospects of a government agency looked pretty good.

“You could get a lucrative job in the financial market right now, but how long can you keep it?” he asked. “Everywhere I look, I see layoffs. If I take a $10,000 or $20,000 pay cut, in the long run, I’m ahead. The government is not in the trading business. It will be around.”

Britan's Biden

According to Michael Kinsley, a "gaffe" is "when a politician [inadvertantly] tells the truth."

Not so much telling some objective truth, but revealing said politician's thoughts. In the United States, the preemminant practitioner of the gaffe is Senator Joseph Biden.

In Britan, now, he has a serious contender: Prince Phillip.

Savor his latest venting:

Prince Philip has branded tourism ‘national prostitution’ in his latest unfortunate gaffe.

He made the shocking comment to a professor during his State visit with the Queen to Slovenia last week.

Dr Maja Uran revealed that the 87-year-old Duke told her: ‘Tourism is just national prostitution.’

He went on: ‘We don’t need any more tourists. They ruin cities.’

His comments come despite royal aides regularly stressing the importance of tourists to Britain’s economy – with one million visiting Buckingham Palace and Windsor
Castle each year.

It follows other infamous faux pas by the Prince – including telling a British student in China he would get ‘slitty eyes’ and asking Aborigines in Australia: ‘Do you still throw spears at each other?’

Dr Uran, associate professor of tourism at the University of Primorska, was among
four groups of experts who met Philip last Tuesday at the Hotel Union in the
Slovenian capital of Ljubljana.

She told Philip she wanted to organise a network of people with local knowledge to help tourists. But she said: ‘He laughed and said, “Tourism is just national prostitution.”

‘I couldn’t quite believe he used that word and we all collapsed in embarrassment.’

All those sweaty tourists, clogging up the roads so that the Rolls is often stuck in traffic. And the well-to-do ones fill up often fill up one's favorite reasturant during The Season.

As bad as I disagree with the viewpoints of American elites, they have nothing on European elites.

More Bailout Thoughts

A few posts back, I said this about the impending government bailout of the financial industry:

So the government (via its new version of the RTC) becomes the mortgage holder for hundreds of thousands of Americans. Already the cry from Democrats is "People before profit."

Will the US be able to resolve the most clear out the very worst of these loans in an fiscally responsible manner?

If there is any possibility of making money on these loans, won't that cause an outcry on the Left?

Jonah Goldberg points out:

Democrats in Congress had great fun using Fannie and Freddie as public policy piggy banks, rewarding constituencies, funding pet projects, forcing the private sector to dance to their tune. What’s to stop them from renegotiating this week’s deal after the election and using Bank of America, Wells Fargo, JPMorgan Chase and the others as Fannie Mae 2.0?

Please don’t say that the terms of the deal are set and the government can’t revise them. If there’s one thing the last month has hammered home, it’s that nothing is written in stone. Besides, the banks may grow to like the security of partial nationalization and even lobby to Congress to stay on as less-than-fully-silent partners.

Heck, that way they wouldn’t have to pay back the loans.

I never thought of that.

Banks might tout the participation of the government as a way to sell their stock, "Hey, the government won't let us fail!"

Bailout Thoughts

So there is a lot of back-and-forth about whether the Paulson Bailout will cost the U.S. trillions of dollars; or whether it will in the end reap a windfall of trillions of dollars.

The question that I have for those that think this may actually make money is this:

Are you nuts?

(Note that I generally applaud buying up distressed assets a fire-sale prices, then making a killing once everybody starts to realize how stupidly they have acted. I am, after all, a heartless capitalist.)

Andy Kessler makes this point in his Wall Street Journal article:

In 1992, hedge-fund manager George Soros made $1 billion betting against the British pound. In 2007, John Paulson's Credit Opportunities fund correctly bet against subprime mortgages, clearing $15 billion for the year and $3.7 billion for him. Warren Buffett is now hoping to make big money on Goldman Sachs.

Chad Crowe

But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion -- yes, with a "t" -- for the United States Treasury...

Firms will haggle, but eventually cave -- they need the cash. I am figuring Mr. Paulson could wind up buying more than $2 trillion in notional value loans and home equity and CDOs for his $700 billion.

So the U.S. will be stuck with a portfolio in the trillions of dollars in bad loans and last-to-be-paid derivatives. Where is the trade in that?

Well, unlike Mr. Buffett or any hedge fund, the Treasury and the Federal Reserve get to cheat. It's not without risk, but the Feds, with lots of levers, can and will pump capital into the U.S. economy to get it moving again. Future heads of Treasury and the Federal Reserve will be growth advocates -- in effect, "talking their book." While normally this creates a threat of inflation and a run on the dollar, and we may see dollar exchange rates turn south near term, don't expect it to last.

First, with Goldman Sachs and Morgan Stanley now operating as low-leverage bank holding companies, a dollar injected into the economy will most likely turn into $10 in capital (instead of $30 when they were investment banks). This is a huge change. Plus, a stronger U.S. economy, with its financial players having clean balance sheets, will become a safe haven for capital.

So where is the downside?

L. Willaim Seidman and David C. Cooke list some of the lessons they learned from the Resolution Trust Corporation in the Savings & Loan bailout of the 1985:

Here are the most important lessons we learned from our experiences in the late '80s and early '90s:

- Acquired assets require active management. Assets tend to lose value while in government hands, as the government seldom can duplicate a private owner's interest in enhancing value. The RTC employed over 10,000 people in the first year of operation.

- Holding large inventories of assets will lead to depressed prices. No one wants to buy when the market has a large overhang of assets just waiting to be dumped when prices improve.

- To get the market started, assets have to be sold at very low prices. Such sales will attract buyers, with a resulting increase in prices. At the same time, selling at low prices could trigger accusations that the agency is "depressing the market."

- Every government sale or purchase creates winners and losers. This results in intense political and economic pressures to influence the actions of the agency. The RTC's independent governance and operations protected against fraud and political influence.

So the government (via its new version of the RTC) becomes the mortgage holder for hundreds of thousands of Americans. Already the cry from Democrats is "People before profit."

Will the US be able to resolve the most clear out the very worst of these loans in an fiscally responsible manner?

If there is any possibility of making money on these loans, won't that cause an outcry on the Left?

You keep using that word...

"...I do not think it means what you think it means."

The Washington Post tells us how rich people spend their time:

People invariably believe that money can make them happy -- and rich people usually do report being happier than poor people do. But if this is the case, shouldn't wealthy people spend a lot more time doing enjoyable things than poor people?

Nobel Prize-winning behavioral economist Daniel Kahneman has found, however, that being wealthy is often a powerful predictor that people spend less time doing pleasurable things, and more time doing compulsory things and feeling stressed.

People who make less than $20,000 a year, for example, told Kahneman and his colleagues that they spend more than a third of their time in passive leisure -- watching television, for example. Those making more than $100,000 spent less than one-fifth of their time in this way -- putting their legs up and relaxing. Rich people spent much more time commuting and engaging in activities that were required as opposed to optional. The richest people spent nearly twice as much time as the poorest people in leisure activities that were active, structured and often stressful -- shopping, child care and exercise.

Kahneman and his colleagues argued that many people mistakenly allocate enormous amounts of their time and psychological focus to getting rich because of a mental illusion: When they think about what it would mean to be wealthy, they think about how enjoyable it would be to watch a flat-screen TV set, play lots of sports or get a lot of pampering -- our stereotypical beliefs of how the rich spend their time.

"In reality," Kahneman and his colleagues wrote in a paper they published in the journal Science, "they should think of spending a lot more time working and commuting and a lot less time engaged in passive leisure."

First of all:

People who must commute to work aren't rich. Rich people don't have to work.

Second of all:

And in the United States in the year 2008, $100,000 per annum isn't rich.

Thirdly:

People who make more money tend to be people who are doing what they want to do. Working 50 to 60 hours a week sounds grim to me, but I'm not making a six figure income.

Lastly:

The same driven, successful people may enjoy structured stressful leisure activities more than "passive leisure." White-water rafting, competitive team sports, sailing, tennis, adventure vacations, all take a lot of effort and planning, yet yield a lot of pleasure to the right kind of people.

If I won the lottery, I would take a few months to put my feet up and veg out, but I think that the lotus-eating would pall after a very short period.