The first time I visited New York City in 1978 I was enthralled with Three-card Monte. I convinced myself that I could win, which is of course, what the con wanted me to believe. Fortunately, I never plucked down any money--it seemed too easy to be true. But apparently the Obama administration has not caught on yet. George Soros, writing in the Wall Street Journal, says that
...the Obama administration plans to use up to $100 billion from the second tranche of TARP funds to establish an aggregator bank, or "bad bank," that would acquire toxic assets from the banks' balance sheets. By obtaining 10-to-1 leverage from the balance sheet of the Fed, the bad bank could have $1 trillion at its disposal. That is not sufficient to cleanse the balance sheets of the banks and restart lending, but it would bring some welcome relief.
I usually just shake my head at such things, but this actually made me laugh. Apparently Obama believes that if it shuffles bad debt around enough times, banks will become healthy and the economy will magically improve. Today the bad debt is on the banks' balance sheets; tomorrow it will be on the Fed's. And who knows where it will be next week? This is nothing but a con game, and the taxpayer is the mark. If a private business engaged in such shenanigans, it would be busted for fraud. The government just cranks up the printing presses.
This is the Way it Should Be
A group of recent college graduates in Boston have started a new web site, http://www.jobaphiles.com/ , that allows potential employees to bid on job postings by employers--the catch is that the prospects bid for their lowest desired salary. In other words, they are allowed to underbid the market in order to get a job.
This is the way it should be. Employees should be allowed to offer their services for any price they choose, even if it is below the government's arbitrary minimum wage or union scale or anything similar. Perhaps the Lily Bedwetters of the world should pay attention.
The Year of the Tenant
New York Assembly Majority Leader Sheldon Silver has declared 2009 "the year of the tenant". (HT: Market Urbanism) Legislators are considering proposals to "strengthen" the state's rent control laws to make it more difficult for landlords to increase rents.
"Housing advocates" recently met with legislators to press their case.
They told their stories to Breslin’s [state Senator Neil Breslin] chief of staff Maureen Cetrino. They spoke of a wholesale erosion in the availability of affordable apartments in New York City and discussed the abuse they said they have suffered at the hands of landlords.
State law allows landlords to remove an apartment from rent control once the rent reaches $2,000 and the apartment is vacated. The parasites complain that landlords harass tenants until they vacate, and they want the government to do something about this "abuse".
Rent control forces landlords to charge less than market prices; it prohibits landlords and tenants from acting in their own self-interest. Rent control reduces housing availability because it reduces the incentives to create more housing. Yet this abuse of landlords is of no concern to legislators and "housing advocates". Their need for cheap housing is more important than the property rights of landlords.
Bank Bailout
A growing number of banks are pulling out of the government's bailout plan. Apparently, they don't like the conditions attached to the money. Michael Ross, president of Fidelity Bank in Dearborn, Michigan, told the AP why his bank pulled out:
These are the guys who brought you Hurricane Katrina. These are the guys who were supposed to be watching Fannie and Freddie. I've not seen anything like this, where they really are talking about nationalizing banks.
When a "deal" with the government has strings attached, those strings are often a noose.
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