Why do I dislike this Post, when I estimate it is mostly True? I know from observance from the Sidelines that Paulson and Bernanke threw out a $700 billion number for TARP without any real evaluation of the size which would be needed. Congress heard the Number proposed, and immediately thought they could sell a lot of Snake Oil with that much money. They passed the Package with no Scaling, imaging their Supporters would be pleased with the increase in the amount of play money generated. Both the Bush and Obama administrations were surprised by the bulk of the TARP, and showed they had little experience at being actual Bagmen. The Bush administration tossed out a couple big jolts of Cash, then started throwing small amounts of Cash like a Pitcher in the 16th Inning. The Obama administration came in, spotted no major Players to aim loose Cash at, and began pitching like they were still in the bullpen. The Reality was that the TARP was too large and excessive, and they have called the Little League in to play Catch.
It becomes worse in that the major Players want to return the Cash, as Congress keeps assigning restrictive Rules to it, and it has become a Game having little to do with the actual economy and performance. The economy keeps sliding, but much more slowly, though not because of any Government Spending; simply because We have bottomed out, and will equally likely rise not because of the TARP spending. Washington is a strange place, and will not accept the lack of Need for the funds; believing they must be spent to justify their previous jitters. The Republicans on the Hill followed the Bush administration lead, and left the financial Albatross; the first time in history that Republicans wanted the Democrats to take the leadership in spending Taxpayer monies. The Democrats came in with the idea of funding washed up ideas scrapped in previous decades, then finding there was really no one to give the money; most organizations funded as fully as they could accept. No one on Capital Hill has the fortitude to simply put the Cash back in the Treasury, so they will spend the money on known inflationary aspects which will distort the Cost schedules of current Production operations.
It is another terrible Sunday for me, God and I don’t seem to be good for each other, aka the Cheap Detective. Being a Devil’s Advocate thereby does not appear to be that bad this morning. I will propose therefore that the best Government incentive at the current moment consists of a semi-draconian cutback of Government spending, with delays in the expenditure of funds across the board; inducing a deflationary increase in Profits in an economy which will not shrink much further. Bad for the Stock Market, bad for Banks, and bad for Government empire building, but generating higher Profits through lower Production Costs. How do you enthuse a Politician about spending less? We could try an old-fashioned Firing Squad, but the American Public would never Sign Off on it. Anything less would be an obvious failure. lgl
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