Posts Tagged ‘government’

This is one of a Series of Short Takes, though this one is not all that short, about the salient issues of the day.  It is explicitly political and likely to offend, though, really, why should you take offense where none was intended?  You have, nevertheless, been warned.

Things don’t happen in a vacuum.  Changing one thing changes other things.  That’s how life is, and we all know it.  Frequently, in our debate, we forget this, and that leads to a lot of silly arguing about what different policy initiatives will do.

For instance, a sports analogy: “Our kicker missed a field goal in the second quarter.  We lost by 2.  If he makes that field goal, we win.”  Nah.  This is silly.  Maybe we would have won, but maybe not, because a thousand other things are affected by those points not being there.  In one of the best examples I know of, back in 2006, BYU trailed Utah in the climactic game of the season with time for only one more play.  BYU QB John Beck, with no time on the clock, threw a pass that went all the way across the field to Jonny Harline, who despite being 6’5″ and 220 lbs had gotten lost by the defense and was all alone in the endzone for the winning touchdown.  This has come to be known by BYU fans as The Answered Prayer.

It has been mentioned several times by BYU fans that BYU missing an extra point earlier in the game was what made the Answered Prayer possible (BYU would have kicked a field goal to tie, but couldn’t, because they were down 4 points in the final seconds, and had to go for the touchdown).  What never gets mentioned is that if that pass had not been completed, the kicker would have been savaged for costing BYU the game.  But he didn’t.  He cost BYU a point.  That’s all.  And in this case, that loss of a point led to legendary heroics that otherwise would not have been witnessed.

Apropos of this: The current discussion all over the country about government benefits, their use and abuse.  Full disclosure: I had a couple of Medicare kids, though I paid for the last six in cash, no government assistance and no health insurance.  I got Pell Grants in college, but I also worked 3/4 time every minute I was there.  I still get baby bonus money in every tax return.  I do benefit and have benefited from government handouts, though not nearly as many as I qualify for.

Nevertheless, I argue against them all.  I do this fully aware of the fact that many of the people that use those benefits need them to eat, or pay rent.  When I argue this, of course, I get a lot of heat about my being heartless, and asked why I hate people so much.  I’ve often wondered how many of those questioners give away 25% of their income every year to various charitable organizations.  My guess is few of them.  And I think therein lies the problem.

When I argue that Medicare should be abolished, I don’t do that in ignorance – or in apathy – with regard to the millions that are getting it now.  The counter-argument is always that those people will receive no care if they don’t have this program (and therefore, by extension, I hate people and want them to suffer and die).

But that is nonsense.  Most of them – the vast majority – will get the same or BETTER care than they get now.  They’ll get it without an endlessly degrading process of submitting paperwork to bureaucrats from every federal agency under the sun.  They’ll get it without costing the hospitals 50% more than they will be reimbursed.  They’ll get it, in short, directly from US, without having Washington take its huge cut on the way through.  Or did you not know that for every dollar in tax, only a small percentage actually ends up in the hands of the recipients?  If Uncle Sam were subject to the same scrutiny that charities are, every member of the Administrative Branch would be in jail.

This isn’t a vacuum.  It’s not the case that raising a tax from 10% to 11% raises 10% more revenue (frequently, it DECREASES revenue).  It is absolutely not the case that eliminating Pell Grants means that fewer people will attain a beneficial education.  It is not the case that eliminating the federal dole will mean widespread starvation and homelessness.  It will only mean those things if we truly are, as a nation, heartless and cruel.

I don’t think we are.  I think we are the most giving nation on earth.  Absent government’s wildly inefficient, wasteful, and fraud-riddled attempts to distribute money to people that don’t have it, the people themselves would – and do, even now – take care of one another.  It will be cheaper.  It will be faster.  It will be simpler.  It will work better.

But only if we understand the ways in which that missing element of government programs will be compensated for.  Only if we stop talking about people that believe in the demonstrated generosity and goodness of Americans as if they wanted to throw people out on the street.  We don’t.  As a group, we give away more of our money – and pay more tax as well – to prevent those things from happening than any other group of people, divided however you choose, on the planet.

That’s one of the reasons we believe that if the government would stop wasting $7 for every $1 of benefit we get, that we would deliver that $1 a lot faster and easier, and have $6 left over.  I don’t want to stop helping people pay their bills.  I just want THE GOVERNMENT to stop.  I believe that in the absence of that extra point, we’ll see heroics that are otherwise impossible.  Or do you really, REALLY believe that in the absence of federal medical assistance, there will be no medical assistance at all?

I believe there will be, because I see it every day.  I am a part of it EVERY DAY.  But I can see how, if you were not doing that, if you were not out on the street helping people, not part of service organizations, not raising money for charities, and not paying huge chunks of dollars to support people in the local community, you would think that the government has to do it or we’re all going to starve.  We tend to see others as we see ourselves.  If you do not do these things – or even if you do, but you do them for other reasons than simple charity – you probably think that nobody else will, either, so the government has to extort the money from us under threat, or we as a people won’t give.

I have good news.  Most people really will help.  Eliminating those programs means more work for us, yes, but it also means more opportunity for us, and more dollars that can be used where they actually help.  I believe we will rise to the occasion.  I believe that if we cannot kick a field goal, that we will drive for a touchdown instead.  Both sides, I think, really want to win.  But I believe that the best way – and the only permanent way – is this way, away from the government taking more and more from us and giving less and less in return, and toward making each of us feel that responsibility we all have to care for one another.

Unfortunately, I doubt very much that my theory will ever be tested except in the most limited terms.  But I can always hope.

NOTE: there are people that argue for the abolition of government programs because they’re angry about being fleeced by people that need to just get a job.  I don’t like those people and have nothing to do with them.

If you want to argue that the government should not be in the business of taking our money to give to other people, then you had better RIGHT NOW be in the business of doing that yourself.  Because someone needs to do it.  It needs to be done.  Everyone, sometime, will need someone else’s help.  If you are arguing that the government shouldn’t be providing it, then you had better be ready to do it yourself.  We want our rights back?  Fine.  We better be prepared to take back our responsibilities to care for one another along with them.  They’re a package deal.

Call me heartless if you like.  I’m a big boy, and I can take it.  But I am prepared to put my heart – yes, and my wallet – on the line to back up what I advocate.  I am willing to undertake the responsibility of learning once again to do what I should always have been doing, caring for the poor and needy, helping those that need my assistance, watching over and supporting those that can’t make it on their own.  I am willing to do it MY OWN SELF.  NOT delegated to HUD.  NOT pawned off on HHS.  NOT through Medicare or Medicaid.  NOT through a bankrupt Social Security program.  MY.  OWN.  SELF.  My money.  My responsibility.

How about you?

I don’t vent.  I don’t blow up.  I think that kind of negative emotion is counterproductive and I fight it.  Still, I’m mortal.  Sue me.

The enemy of growth is uncertainty.

I am a gardener some of the year, in my spare time, and I have about a hundred houseplants, and I’ve learned a few things from this activity that bear directly on the current economy.

Plants grow well in certain conditions. They like there to be a certain amount of light, a certain amount of heat, and a certain amount of water. Not an average over a week, mind you, but a definite amount every day. No water for six days, then 3 gallons all at once will kill most plants. Light uninterrupted for four days, then three days of darkness is not really conducive to good growth. An average temperature of 65 is great, as long at it doesn’t consist of half the time at 30 and the other half at 100. Plants like it predictable. A little water today, a little more tomorrow. 14 hours of light today, 14 hours tomorrow. Temperatures in the 60-70 range all the time.

Oh, they’ll still grow if things are a little sketchy. They can take a few days of rain, then a few days of bright sunshine and heat. If the soil’s not right, or the water is the wrong ph, or there are rocks to negotiate, they can handle that, but they won’t grow as well as they might otherwise have, and if two or three of those things combine, the failure rate goes up pretty fast. Bugs, incidentally, love to attack weak plants. They tend to leave stronger ones alone. What that means is that once you start down the path to weakening your plants, you can expect other things to start going wrong and make things worse.

Let’s apply this to the current economy, shall we?

Corporations like things predictable. If they know what tax policy is going to be, they can concentrate reserves and personnel on development and growth. If tax policy is changing every ten minutes, a lot of those resources are channeled into figuring out whether today’s successful business model is going to be illegal in a year, or perhaps next week. It’s distracting and it’s destructive.

In the mortgage industry, which is my industry, we’ve spent the last year trying to figure out what all the new rules and regulations mean for us, how much extra time we will have to devote to managing the increased paperwork, and whether whole lines of business are even viable. Some of us – the best of us – will survive this, too, as we’ve survived everything else so far. But NONE of us will do better work for the client or ourselves than we would have if we’d been left alone. ALL of us, and this goes for the Top 100 all the way down to the green kid that just got his license, are spending huge amounts of time learning to navigate government regulations instead of trying to do a good job for the borrower.

The argument is fairly made that if we had spent our time doing a good job for the consumer in the first place, we wouldn’t have all this government regulation, so it’s our own fault. But this argument is stupid.

First off, it’s not the broker on the street that created the 100% no-down 520 FICO no-doc loan. All the brokers did was sell the product. Was it a mistake to sell it? I guess. But you know the part of page 3 of the 1003 that asks all the invasive questions about race and sex and national origin? That’s not there because brokers needed more boxes to check. It’s there because the government will sue you and put you in jail if you don’t make loans to people, especially low-income people and MOST especially people that routinely fall into the category of higher-risk borrower. A broker could decide not to sell any of those products at all, but this is sort of like deciding not to sell iPhones because you think that it’s a fad and people will eventually figure out that you can’t replace the battery. It’s stupid to do this. Businesses exist to make money, and failing to sell what people are buying, just because you don’t like it yourself, is a great way to end up working at WalMart. No offense, Mr. Walton. This is even more especially true when the Department of Housing and Urban Development can put you in federal prison for not doing so.

Second, the vast majority of the problem in the real-estate industry has been caused not by bad loans, but by bad houses. Not that they’re poorly constructed, but that they were overpriced. Some of that is the fault of the lending institutions, which created loans that roughly doubled the available pool of buyers, naturally (and somewhat artificially) boosting home values. At least as much of it is the fault of the government, pushing said lenders to create loans for people that traditionally default in huge numbers. And a lot of the fault has to be carried by the Fed, leaving interest rates at ridiculously low levels for a long time, again reducing the cost of buying and ramping up demand. None of that stuff has anything to do with the loan officer on the street.

And lastly, there’s the elephant in the room, which is that none of the government regulations will do one blessed thing to make any of the above less likely in the future. None. Not HVCC, a lawsuit about a lender-owned AMC that specifically permits lender owned AMCs to continue. Not HERA, a gigantic waste of time and money that pushed closings back a week or more on most loans. Not RESPA, The Sequel, which hilariously creates a new, “simpler”, 3-page Good Faith Estimate that is so iron-bound that no lender with any reputation will issue one until the borrower signs a notarized contract to do business with that lender and nobody else. Not one of these byzantine regulations – oh, and let’s include the national database of loan originators, which now requires a fingerprint card, as if there were any evidence whatever that such provisions have reduced any kind of fraud in any industry – will do anything whatever to reduce the incidence of evil people duping stupid ones.

But it will make it so that the good loan officers are unable to distinguish themselves from the rest of the herd. It will make it more expensive, more complicated, and more difficult to continue to work in this industry, which will chop down the number of players and – consult any economics textbook – raise the prices for the borrowers.

Our plant will continue to grow. We will make it through the drought, through the hail, and force our roots through the rocky ground. We will survive. But we will never produce the fruit that we could have, and no one else will, either. And tens of thousands of our compatriots will be out there competing for the six available jobs, having been killed off not by incompetence or laziness, but by the twin terrors of the Great Recession and Uncle Sam.  Worst of all, we can’t even plan for what we’re going to do next year, because we never know from one minute to the next what new dragon will rear its head.  Not a market dragon, hard as those are to deal with, but the mighty dragon of government, trying to “help”, and changing the temperature and the landscape because it makes re-election a better bet.

Happy New Year.

I get lots of flattering pub because of my philanthropic activities, and people have recently said – in my hearing – that I’m one of the most generous people they know.  So, in the interest of stopping this right now, let me offer the following:

First, read this article.  For the lazy, it’s about how a Good Samaritan was ticketed for jaywalking after helping some old ladies across the street in a snowstorm.  He was hit and hospitalized after pushing the ladies out of the way of an oncoming truck.

Finished?  Make you blood boil?  Great.  Glad to hear it.  Because I’m going to argue that the ticket is justified, because that’s the way we have chosen to handle these kinds of situations.  It’s the wrong way, and there’s a better way, but this is the one we chose and as long as we have it, it needs to be followed.

Let’s try this another way. Suppose the pickup driver had MISSED them, but totaled his truck trying to avoid people wandering around in the middle of the street in a snowstorm. Who should compensate the driver for his truck? Obviously, if you injure someone or damage their property, even if you’re Mother Teresa, you have to take responsibility for that injury. It doesn’t matter if you didn’t mean to. It doesn’t matter if you were averting a greater injury. If you cause damage to someone through your actions, you should compensate the injured party for that damage.

And yes, the driver is being held to that same standard, and his bill is going to be a lot higher.

Of course, it must be said, the system we suffer under isn’t constructed to handle property-rights claims in the simple way I have outlined above. Under the current system, only the GOVERNMENT will get compensated, through ticket revenue and fines. The driver will not have to pay for the medical bills of the guy he hit, and the guy he hit will not have to compensate the driver for the damage to his truck. The injured parties will have to deal with the government instead of each other. There is nothing whatever of justice in it.

But then, I advocate a system where the government doesn’t have a role in these sorts of things.  The court system is where these kinds of competing claims ought to be administered, but that would require a very different court system to the one we currently “enjoy”, and a significantly greater percentage of the population to qualify as adults.  I’m not holding my breath.

In my town, a lay judge, someone agreed on by both parties as being fair and impartial, would take the busted truck and the busted guy, weigh the circumstances, judge according to the available evidence, and render a decision that would have compensation to the injured parties.  No tickets need to be issued (what does the city have to do with this, anyway?), and no police involved (there aren’t any crminals here, no one that is dangerous and has to be restrained).  Simple justice, meted out by a judge so that everyone gets a fair shake.

It requires a twist to the current way of thinking, but it would work.  It has worked.  It DOES work.

Okay, so everyone’s asking what I think of the bailout. Let me get this on the record: I don’t know. The fact is, nobody knows. That’s one really, really good reason to vote “no”.

Most people are a lot like me; they don’t really know what the bailout contains, so they’re generally opposed to it because this is not what government is supposed to be doing (or, alternatively, this IS what government is supposed to be doing, but it should be doing it for ME, and not for other people, depending on your home base on the political spectrum). But they also recognize that something is very, very wrong with the world financial system, and the only people that seem interested or capable of doing something about it are the people in Congress. So we’d like to see something happen, and sooner rather than later.

Several comments need to be made here:

1. It’s silly, and I mean really silly, to blame Republicans for the bailout not passing. If you’re Speaker of the House, you have to get more than 60% of your own party on board. No, the GOP isn’t helping you, or the President, who is supposed to be a member of their party. Guess what? Right now he’s ideologically closer to you than to them, Nancy, a point which I guarantee you won’t be emphasizing in the next 5 weeks.

2. Early reaction is that the Republicans are going to catch it for voting this thing down. Nah. There are two reasons this is incorrect: one, the fact is that most of the nation, and by far the majority of people likely to be voting in November, were not supporting this bill, and two, something is finally going to get passed, and if it’s even marginally better than what failed, the GOP comes off looking like Horatio at the Bridge. This will not be good for the Democrats.

3. There is a lot being made of how this bill would cost taxpayers $700 billion. This is just silly. It wouldn’t cost even close to that much. [note: I am not saying this to support the bailout. I am saying it because it is true. I don't like winning arguments using bad facts or bad logic, even if I can win that way. There are reasons not to vote for the bailout, but this isn't one of them.] The government would be buying assets (at least some of what they spend will buy straight mortgages, for instance), and those assets have value. In fact, they almost certainly have greater value than their cost. I predict that if the bailout finally passes, that the government will eventually turn a substantial profit on the deal. This is actually worse than if the government lost money, and I’ll elaborate below.

4. There is at least one plan I have heard that makes much more sense (I think) than what was voted down on Monday. That plan would still authorize the expenditure of hundreds of billions, but would require that those billions be spent exclusively on the whole mortgage notes being held by banks, and not on the Collateralized Debt Obligations (CDOs)those mortgages ostensibly back, much less other debt that banks are holding. This does several positive things, in my opinion. First, it allows the government to demonstrably spend our money on things with real value. Not 100% of face value, I grant this, but some value. Even houses in downtown Detroit or suburban Cleveland have some value. The mortgages can be bought cheap and the value maximized by, second, negotiating the terms of the note with the homeowner when he’s in default, to allow him to stay in the house. In a rising market, foreclosure is a good option for recovery of value. In a declining market, it sucks. It not only loses immediate value on the note itself, but it exacerbates the decline of property value across the board, further harming the asset value of your other mortgages. The government has been yammering at mortgage servicers to undertake this negotiative process; this plan would allow the government to just do it themselves. Second sub a, it would put shims under dropping property values by reducing foreclosures. Third, it would pour liquid cash into banks, which is desperately needed, and fourth, it would put a floor under the CDOs, because the bad mortgages that have destroyed their value would now be backstopped by the government. Those notes would therefore begin to trade again, and the machine would re-start.

This plan, I suspect, has no possible chance of being enacted. It would still have two bad effects; one, it would give government a huge windfall if it did its job properly and two, it still isn’t what government should be doing with taxpayer money. But since it is going to do something with it, this seems the least harmful in the long run.

5. When the government makes money on an investment, it spend it on some pet project it couldn’t get taxpayers to back. This is true at every level of government. Did you know that the Chrysler bailout in the 80s produced a $500 million windfall? No? YOu don’t remember getting a check for your share? Darn right you don’t. And if the government succeeds in getting this bailout to pass, and if it works, the government will get a profit that will dwarf the Chrysler windfall and make Exxon-Mobil look like a kid’s lemonade stand. If the government gets these assets at .20 on the dollar, which seems likely, and they are worth .45 on the dollar, which, if the bailout is successful, also seems likely, the government will make a trillion-dollar profit. That money will not be paid out to you and me. It will instead be used to fund all the pet projects Congress can’t get popular support for, like, most certainly, universal health care, among many many others. It will also lead Congress to believe that other intervention in other markets can have the same effect, and what you will get is socialism on a grand scale and the destruction of the free world. I do, in fact, predict that this is what will happen.

6. Europe is supposed to be immune to this cycle of crash and boom, because of its superior controls (read: socialism) provided by the government. Haha. Watch the news. The problems in Europe are worse, and they have no way to fight them. The EuroFed is only supposed to keep inflation in check, and has no mandate to stabilize markets. Oh, inflation is in check all right. It usually is when you have rising unemployment. The EU needs a bailout package as badly as we do, but they don’t have any mechanism for getting one.

7. From a free-market perspective, the best thing to do is nothing at all, or to repeal some of the stupid regulations that contributed mightily to the current crisis. If the government will stop “rescuing” some things and not rescuing others, so that everyone knows they have to win or lose by these rules that exist right now, things will get worse very fast and better starting fairly shortly. I will lose my business, but I’m volunteering to do that if it will help convince the government to force the market to deal with its own problems. I’m not advocating some nebulous “hard time” for others; this would be my own financial ruin, despite my not having contributed in any way to the crisis. But it’s the right thing and the best thing.

Instead, what we’ll do is keep the comatose patient alive until all the organs fail at once and we have global meltdown and blood in the streets.

8. This brings me to the religious portion of this post, which you may skip if you don’t care for that sort of thing. We know that this kind of financial meltdown is going to happen eventually. Most of us will have no idea it’s happening until it’s too late, which is why we are advised to be ready at all times. As the canary in the coalmine, so to speak, let me say that I do not think that this is the “big one”. I think this is a head fake. It is a very clear, very obvious, somewhat painful warning that God is not kidding around when He tells us to be ready. But it is not going to be the beginning of the end. It is, however, the beginning of the beginning of the end. It is the day and a night and a day with no darkness. Right now, it’s really obvious that the warnings we’ve been given to prepare are serious, but the signs will fade and things will go back to “normal”, and we will forget, and the shock will be somewhat complete when, a few years from now, we get the three days of darkness and the tempests and the floods and the earthquakes. DO NOT FORGET. No matter what semblance of “normalcy” we get from whatever bailout passes, we must not forget. Get out of debt. Get food and water stored up. Lean on Christ and come to know Him well. Get close to the Spirit and listen to his voice. We have been warned.

And that’s it for the longest post of my career. Let the comment wars begin.

Okay, so everyone’s asking what I think of the bailout. Let me get this on the record: I don’t know. The fact is, nobody knows. That’s one really, really good reason to vote “no”.

Most people are a lot like me; they don’t really know what the bailout contains, so they’re generally opposed to it because this is not what government is supposed to be doing (or, alternatively, this IS what government is supposed to be doing, but it should be doing it for ME, and not for other people, depending on your home base on the political spectrum). But they also recognize that something is very, very wrong with the world financial system, and the only people that seem interested or capable of doing something about it are the people in Congress. So we’d like to see something happen, and sooner rather than later.

Several comments need to be made here:

1. It’s silly, and I mean really silly, to blame Republicans for the bailout not passing. If you’re Speaker of the House, you have to get more than 60% of your own party on board. No, the GOP isn’t helping you, or the President, who is supposed to be a member of their party. Guess what? Right now he’s ideologically closer to you than to them, Nancy, a point which I guarantee you won’t be emphasizing in the next 5 weeks.

2. Early reaction is that the Republicans are going to catch it for voting this thing down. Nah. There are two reasons this is incorrect: one, the fact is that most of the nation, and by far the majority of people likely to be voting in November, were not supporting this bill, and two, something is finally going to get passed, and if it’s even marginally better than what failed, the GOP comes off looking like Horatio at the Bridge. This will not be good for the Democrats.

3. There is a lot being made of how this bill would cost taxpayers $700 billion. This is just silly. It wouldn’t cost even close to that much. [note: I am not saying this to support the bailout. I am saying it because it is true. I don't like winning arguments using bad facts or bad logic, even if I can win that way. There are reasons not to vote for the bailout, but this isn't one of them.] The government would be buying assets (at least some of what they spend will buy straight mortgages, for instance), and those assets have value. In fact, they almost certainly have greater value than their cost. I predict that if the bailout finally passes, that the government will eventually turn a substantial profit on the deal. This is actually worse than if the government lost money, and I’ll elaborate below.

4. There is at least one plan I have heard that makes much more sense (I think) than what was voted down on Monday. That plan would still authorize the expenditure of hundreds of billions, but would require that those billions be spent exclusively on the whole mortgage notes being held by banks, and not on the Collateralized Debt Obligations (CDOs)those mortgages ostensibly back, much less other debt that banks are holding. This does several positive things, in my opinion. First, it allows the government to demonstrably spend our money on things with real value. Not 100% of face value, I grant this, but some value. Even houses in downtown Detroit or suburban Cleveland have some value. The mortgages can be bought cheap and the value maximized by, second, negotiating the terms of the note with the homeowner when he’s in default, to allow him to stay in the house. In a rising market, foreclosure is a good option for recovery of value. In a declining market, it sucks. It not only loses immediate value on the note itself, but it exacerbates the decline of property value across the board, further harming the asset value of your other mortgages. The government has been yammering at mortgage servicers to undertake this negotiative process; this plan would allow the government to just do it themselves. Second sub a, it would put shims under dropping property values by reducing foreclosures. Third, it would pour liquid cash into banks, which is desperately needed, and fourth, it would put a floor under the CDOs, because the bad mortgages that have destroyed their value would now be backstopped by the government. Those notes would therefore begin to trade again, and the machine would re-start.

This plan, I suspect, has no possible chance of being enacted. It would still have two bad effects; one, it would give government a huge windfall if it did its job properly and two, it still isn’t what government should be doing with taxpayer money. But since it is going to do something with it, this seems the least harmful in the long run.

5. When the government makes money on an investment, it spend it on some pet project it couldn’t get taxpayers to back. This is true at every level of government. Did you know that the Chrysler bailout in the 80s produced a $500 million windfall? No? YOu don’t remember getting a check for your share? Darn right you don’t. And if the government succeeds in getting this bailout to pass, and if it works, the government will get a profit that will dwarf the Chrysler windfall and make Exxon-Mobil look like a kid’s lemonade stand. If the government gets these assets at .20 on the dollar, which seems likely, and they are worth .45 on the dollar, which, if the bailout is successful, also seems likely, the government will make a trillion-dollar profit. That money will not be paid out to you and me. It will instead be used to fund all the pet projects Congress can’t get popular support for, like, most certainly, universal health care, among many many others. It will also lead Congress to believe that other intervention in other markets can have the same effect, and what you will get is socialism on a grand scale and the destruction of the free world. I do, in fact, predict that this is what will happen.

6. Europe is supposed to be immune to this cycle of crash and boom, because of its superior controls (read: socialism) provided by the government. Haha. Watch the news. The problems in Europe are worse, and they have no way to fight them. The EuroFed is only supposed to keep inflation in check, and has no mandate to stabilize markets. Oh, inflation is in check all right. It usually is when you have rising unemployment. The EU needs a bailout package as badly as we do, but they don’t have any mechanism for getting one.

7. From a free-market perspective, the best thing to do is nothing at all, or to repeal some of the stupid regulations that contributed mightily to the current crisis. If the government will stop “rescuing” some things and not rescuing others, so that everyone knows they have to win or lose by these rules that exist right now, things will get worse very fast and better starting fairly shortly. I will lose my business, but I’m volunteering to do that if it will help convince the government to force the market to deal with its own problems. I’m not advocating some nebulous “hard time” for others; this would be my own financial ruin, despite my not having contributed in any way to the crisis. But it’s the right thing and the best thing.

Instead, what we’ll do is keep the comatose patient alive until all the organs fail at once and we have global meltdown and blood in the streets.

8. This brings me to the religious portion of this post, which you may skip if you don’t care for that sort of thing. We know that this kind of financial meltdown is going to happen eventually. Most of us will have no idea it’s happening until it’s too late, which is why we are advised to be ready at all times. As the canary in the coalmine, so to speak, let me say that I do not think that this is the “big one”. I think this is a head fake. It is a very clear, very obvious, somewhat painful warning that God is not kidding around when He tells us to be ready. But it is not going to be the beginning of the end. It is, however, the beginning of the beginning of the end. It is the day and a night and a day with no darkness. Right now, it’s really obvious that the warnings we’ve been given to prepare are serious, but the signs will fade and things will go back to “normal”, and we will forget, and the shock will be somewhat complete when, a few years from now, we get the three days of darkness and the tempests and the floods and the earthquakes. DO NOT FORGET. No matter what semblance of “normalcy” we get from whatever bailout passes, we must not forget. Get out of debt. Get food and water stored up. Lean on Christ and come to know Him well. Get close to the Spirit and listen to his voice. We have been warned.

And that’s it for the longest post of my career. Let the comment wars begin.