Tag Archives: bailout

All Gaga for Obama

In celebration of Obama’s first 100 days, and also given the popularity of Lady Gaga, I decided to try a bit of songwriting for the President.  The following should be sung along to Lady Gaga’s Poker Face (play the song in a new window – with lyrics | instrumental):

Barack (0:24):

I gotta clean up what they did back in ’08
Corrupted and got busted with a messed up SEC (Oh Dubya)
So now the country’s sufferin’ and the times are hard
With Ponzi schemes and broken dreams and guys without a job

Oh, oh, oh, oh, ohhhh, ohh-oh-e-ohh-oh-oh
I’ll get it right, or we’ll pay the price
Oh, oh, oh, oh, ohhhh, ohh-oh-e-ohh-oh-oh,
I’ll go at it hard, show them who’s in charge


With Larry
And Timmy
These are the
Obama days
(Gotta stop the Dow from dropping)
Plus Citi
The Fed completes the
Obama days
(Government is going shopping)

Chorus (1:12):

Oh-oh-oh-oh-oh-Obama days, Oh-oh-oh-oh-oh-Obama days
Oh-oh-oh-oh-oh-Obama days, Oh-oh-oh-oh-oh-Obama days

Barack (1:21):

I’m gonna roll with Joe a hard pair we will be
Republicans can teabag all they want with Dick Cheney
Afghanistan will see me coming on the front,
And baby when it’s war if it’s not rough it isn’t fun,

Oh, oh, oh, oh, ohhhh, ohh-oh-e-ohh-oh-oh
I’ll get Iraq, show them what I’ve got
Oh, oh, oh, oh, ohhhh, ohh-oh-e-ohh-oh-oh,
I’ll get a bomb, show them that it’s hot

karzaizardari1With Karzai
So close by
These are the
Obama days
(Karzai is grumpy, likes nobody)
Talking peace
These are the
Obama days
(Waterboarding’s not his hobby)

Chorus (2:09):

Oh-oh-oh-oh-oh-Obama days, Oh-oh-oh-oh-oh-Obama days
Oh-oh-oh-oh-oh-Obama days, Oh-oh-oh-oh-oh-Obama days

Barack (2:24):

gm-ceoI’ve got my hand in GM’s pocket
Squeezing hard to keep ’em knockin’
‘Cause I’m trying
To go on and end this downspin we’ve been rockin’
With my bailouts and my guarantees
I’m fixing these securities
I promise this, I promise this
I’ll bring back life to AIG

aigsoccerWith swine flu
Coming through
These are the
Obama days
(Bacon’s not for everybody)
Arlen who
S’my new boo
These are the
Obama days
(Specter’s got a new buddy)

Chorus (2:59):

gagaobamaCan’t beat my
Can’t beat my
No one can beat my
Obama craze
(He’s got me like nobody)
Can’t beat my
Can’t beat my
No one can beat my
Obama craze
(Eight more years of peace and harmony)

— Repeat x2 —

Oh-oh-oh-oh-oh-Obama days, Oh-oh-oh-oh-oh-Obama days
Oh-oh-oh-oh-oh-Obama days, Oh-oh-oh-oh-oh-Obama days

1 Comment

Filed under Arts and Entertainment, News, Politics

Semi-Serious Ideas for the Betterment of Society

1. LICENSE TO BREED: You need a license to drive, to carry a gun, and to practice medicine, so why don’t you need a license to have a child? octomomDrivers’ licenses encourage safety on the road, gun permits allow us to keep track of our WMD, and medical licenses keep witch doctors away from the unsuspecting public. Along with safe streets, (arguably) less violence, and healthy people, shouldn’t we also strive for having better educated parents? Thus, let’s make people apply for licenses to breed before they start popping out devil bobbarkerdogchildren. Instead of swerving around cones in driver’s ed, applicants will learn to change diapers in parent’s ed. Of course, we can’t control the fact that some unlicensed deviants will still churn out babies under our nose. But to counter that, we could offer substantial tax relief only to licensed parents. With such a plan in place, perhaps this will discourage the Octo Mom from adding to her litter.

2. GET YOUR IRRESPONSIBLE FRIENDS SPADED AND NEUTERED: This would be Plan B, just in case the child license law fails to pass the Senate.

3. LOJACK YOUR CHILDREN: With modern technology, there has to be an easier way to keep track of your children. lojack2Imagine going to Wal-Mart and buying a Stolen Child Recovery System for $695 (about the same retail price of a LoJack for your car). With this system, you would get a tiny, non-invasive tracking device that you can stick on your child’s body. To them, it would seem like a bumpy freckle. To you, it would be peace of mind. With all the kooks and the baby-crazed unlicensed parents out there, you’d know that your children are safe. You’d also know if your daughter was sneaking over to Bobby’s house instead of going to the library, like she said. So, for the sake of protecting the privacy of the wild youth, perhaps we’d have to limit the LoJack tracking device to kids under the age of 10.

taxes4. VICE TAXES: Vice taxes are not new, as the success of cigarette and alcohol taxes have led the Pigou crew to lobby for pollution and gasoline taxes as well. But if taxes really do impact behavior as much as economists like to believe, then why not tax vice in general? Anytime someone commits a crime, they’ll still have to go to jail or pay a fine, but we can also increase their effective tax rate for a specified period of time. (Just call me Dr. Seuss.) Get caught with a high-end prostitute? Pay a lump sum $500 fine, and then watch your tax rate jump from 35% to 38% for a year. Simple assault? Do your time in jail, then get released to +5% in your tax bracket over two years. Hey, if taxes really are the cure-all, then such a policy could have enough positive deterrent effects to justify its failings in rehabilitation.

5. GET RID OF HIGHWAY PATROL: One of the most costly and inefficient functions of law enforcement is highway patrol. highwaypatrolHere’s an alternative solution: all registered vehicles must now get a small barcode stamped on each side of the car. Law enforcement will place discreet barcode scanners along the road, which will act sort of like the scanner at the grocery store checkout. When you’re speeding along the highway at 120, the scanner flags your car as “speeding”, and your registration information is automatically transferred to the police. Given that there might be several thousand people caught speeding a day, there will be some limits on how punishment is applied — perhaps out of every 1,000 vehicles caught speeding, 100 will be randomly chosen and ticketed. Or, perhaps every vehicle registrant will be notified that they were speeding, and everyone will get one black mark on their record… Ten black marks, and your license will be suspended. The possibilities are endless. And with the money we save on highway patrol, we can allocate more funds to worthy government ventures, like teaching our children… or bailing out AIG.

1 Comment

Filed under Random

Bailouts By The Numbers

Got Money?  / You Know It / Take it out your pocket and show it then throw it / This a way / That a way/ This a way / That a way…

citigroup$700 billion: TARP (also known as “stocking stuffer” on Wall Street)

$787 billion: Obama’s new stimulus package

$18-$50+ billion (and rising): Auto industry

$75 billion: Mortgage bailout for 4 million homeowners… ($18,750 per homeowner)

aig$80 billion+ (and more than $150 billion more in guaranteeing its loans): Citigroup

$150 billion+ (and rising): AIG

$400 billion: Fannie and Freddie

Total of just these bailouts: $2.2 trillion

In Comparison:

oprah-rich1$14.3 trillion: GDP of United States ($4.8 trillion: GDP of #2 Japan, $4.2 trillion: GDP of #3 China)

$65 billion: Market cap of Enron in its heyday

megamillions$58 billion: Net worth of Bill Gates

$1.5 billion: Net worth of Oprah

$750 million: The record amount that Obama raised during his run to the White House


Madoff’s $50 Billion Disappearing Act

madoff115: Countries with less than $50 billion in GDP (including the Dominican Republic, Kenya, and North Korea)

235: Times you’d have to win the Mega Millions $212 million jackpot

820: Number of Empire State Buildings you could buy, according to a recent appraisal ($61 million)

bentley1,786: Years you could (over)pay A-Rod ($28 million/year)

146,630: Number of new Bentleys you could buy 

Hitting the Fan

$300 billion: Market cap of GE in 2008

$71 billion: Market cap of GE today (around $7 a share)

Leave a comment

Filed under Economy, News

Where Have All The Good Times Gone?

Last summer, we were just coming to the realization that the economy might be in some trouble… Bear Stearns had fallen, oil prices were skyrocketing, and George W. Bush was still President. It wasn’t a good time.

We started 2009 thinking that the bad karma in ’08 was all in the past… but a quick comparison suggests that it may be rougher now compared to back then:

Summer 2008 Winter 2009
What’s worse?
Nick Jonas breaks up with Miley Cyrus over the phone Chris Brown breaks Rihanna’s heart… and her nose Obviously Chris Brown… you don’t send your girlfriend to the hospital, ever
Summer 2008 Winter 2009
What’s worse?
Sarah Palin campaigning for the Vice Preisdency Tim Geithner campaigning for $789 billion Sarah Palin by a wink
Summer 2008 Winter 2009
What’s worse?
A-Rod and Madonna A-Rod and a syringe Almost a toss-up between infidelity and ‘roids, but the juice is illegal… so it’s got to be worse
Summer 2008 Winter 2009
What’s worse?
Brett Favre un-retires Brett Favre re-retires Un-retired Brett Favre… the last month of the season counts
Summer 2008 Winter 2009
What’s worse?
Angelina Jolie has twins! Crazy Angelina wannabe has octuplets! Crazy woman… Angelina only has 6 kids compared to her litter of 14
Summer 2008 Winter 2009
What’s worse?
$11 billion (August market cap of soon-to-die Lehman) $50 billion (Bernie) Yup, a vanishing $50 billion is worse…
Summer 2008 Winter 2009
What’s worse?
Down 9% from June to August, finishing just over 11,000 Down 10% year-to-date, clocking in under 8,000 Help.

Final count of crappiness? Summer ’08: 2… Winter ’09: 5

So, things are definitely not getting any better in 2009. In fact, they’re really spiraling more and more out of control, towards utter despair and desolation. But… at least we totally kicked last summer’s ass.

Leave a comment

Filed under News, Random

With $700B, I’d Like to Buy Belgium, Greece, and Ireland, Please

UPDATED (2/5/09): First, the government decided that “bailout” wasn’t all that PR-savvy, so instead, $700 billion became part of the Troubled Assets Relief Program (TARP). TARP then went to Wall Street, where it funded employee bonuses and baseball stadiums. Instead of creating liquidity in the markets, the Wall Street banks hoarded their TARP money, perhaps to save up for corporate jets, Vegas getaways, or 19th-century credenzas. Now, with a new year, a new president, and a new bailout package, we’re hoping for a different result. With BusinessWeek already deeming the original bailout a “bust“, I’m looking back on what I wrote when the TRAP (sic) was first proposed. After all, with $825 billion or more at stake, a call for prudence may find a receptive audience today.

ORIGINALLY POSTED (9/25/08): By now, most of us know that our economy is struggling. Credit is scarce, banks are teetering, and President Bush finally came out of his batcave on Wednesday to make a sobering speech. Giving a concise summary of how our economy began its precipitous freefall, the President conceded that this doomsday had been building “over a long period of time”… meaning, before his eight years in office.

However, as much as I found myself agreeing with some of the President’s assessments, I could not help but feel disturbed by the hastily-constructed $700 billion rescue plan, and the President’s intentions of pushing it through as soon as possible. Haven’t we heard the same act-now-or-forever-lose-your-peace spiel before (cough, cough: Iraq)? Except this time, instead of peace, we’re losing our houses, our money, and our material possessions. I could not help but be amazed at the President’s staunch conviction: warning of imminent recession and homelessness, he appealed to the same sense of urgency with which he implored Congress to start the war five years ago. “Without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold. More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet….Millions of Americans could lose their jobs….And, ultimately, our country could experience a long and painful recession.”

But, isn’t this the administration that gave us the Patriot Act, a trillion dollar oil quest, and an economic stimulus check that was supposed to prevent things like this from happening? Needless to say, the President has not had a favorable track record in times of crisis (or, for that matter, in times of peace). And the impact of this decision has consequences not only for our country now, but globally for years to come. So instead of a call for action, this should be a call for prudence. Instead of asking for our money, the President should be asking for our patience. Economists demand it. Congress needs it. Everyone knows that we can’t prolong the decision on this bailout, but we can’t just pound it out in less time than it takes to buy a ficus from Amazon.com.

In the end, the Bush administration’s proposed $700 billion plan may be the best way to get us out of this turdburger. But if that’s the case, I hope that our lawmakers will have come to their conclusion after setting emotions aside and considering all other options. After all, $700 billion is a lot of money: that’s 778 Big Macs per person, 4 brand new Mac laptops per household, or 833 million Maxim yearly subscriptions for life. And so if this bailout goes through, and Americans are forced to give up either food, computers, or our trashy magazines, whoever wins the upcoming election will have to deal with some pretty angry (and hungry) constituents.

1 Comment

Filed under Economy, News

Auto Industry Bailout: For or Against?

The case AGAINST:

Simple economics: If the Big Three automakers fail, it’s because someone else is doing it faster, better, and cheaper. And that won’t change with a measly $15 bn loan that can barely cover the companies’ monthly billion-dollar losses… As they say, you can’t teach an old dog new tricks. Any bailout will just be delaying the death.

carsTime to restructure: Just as it doesn’t make sense to grow oranges in Minnesota, it may not make sense to mass-produce cars in the US. GM, Ford, and Chrysler all have profitable overseas operations, but they’re getting squeezed here at home with higher costs, tighter regulations, and powerful unions. We’ll have to take the hit sometime, so why waste taxpayer money? It’s time to acknowledge that the economics just cannot support an auto industry in Detroit.

Bailing out a lack of innovation: Finally, Tom Friedman likens an auto industry bailout to funding typewriter companies on the eve of the birth of computers.

The case FOR:

lions_fanLost jobs: If there is no bailout and the Big Three automakers must reduce production, a conservative estimate is that we will lose 453,000 jobs next year; others have said it could be as bad as 2.5 million. What will all these people do next? Watch the Lions go 0-16?

Repaying taxpayers: Letting the car companies fail would lead to less tax revenue from lower incomes and lost jobs–which may end up costing us more than an upfront loan funded by taxpayers. Plus, there’s always the chance that the car companies could take the loan and actually turn things around… meaning we’d get our money back eventually, even if it’s in yen.

Like our economy isn’t crappy enough already… let’s just make it worse. The death of the auto industry would have a ripple effect on the entire economy, just as we saw with letting Lehman fail (bailout of AIG, collapse of WaMu, hello-goodbye of $700 bn). If the Big Three go down, taxpayers may eventually have to jump in and bail out everyone on down in the supply chain, plus insurers, pension guarantors, etc. How long could it take to get out of this? Well, how long have the Lions been in the “re-building” phase? Years and years.

What do you think?

Leave a comment

Filed under Economy, News

Random Thoughts on… Moral Hazard

An argument for studying economics is that one will leave school with an extensive knowledge of concepts and theories that are applicable in the real world.  An argument against studying economics, however, is that these theories are typically limited to a world where we assume all participants make rational decisions.  Given that Kath and Kim is still on the air, universal rationality is doubtful.

One economic concept, however, has stuck with me after college.  Moral hazard occurs when “an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would,” thus “leaving another party to bear some responsibility for the consequences of those actions.”  For example, there is a moral hazard associated with life insurance.  After purchasing insurance, individuals may decide to take greater risks with their life.  twilightThey may be keener to go skydiving, try bungee jumping, or enter a crowd of teenage girls in line for Twilight.  After all, these individuals are now insured, so we can rationally understand (from the individual’s point of view) why they would be more likely to participate in dangerous activities.  However, from the point of view of the insurer, braving crowds of crazed middle schoolers pining after vampires is not recommended. 

We face moral hazards every day.  On an individual level, athletes anecdotally have had a drop-off in production following the signing of a guaranteed, long-term contract.  We act differently in a hotel room than when we’re in our own homes.  In my intro economics course, Larry Summers summed it up in a guest lecture: “You don’t wash a rented car.”   

In that same line of thinking, government bailouts may cause big companies to take more risks, with anticipation of being saved if they fail.  This can lead to even more trouble, as evidenced by the mortgage crisis (mortgage lenders that securitized their junky loans, backed by Fannie and Freddie, became more lax in lending).  Part of the Fed’s rationale for letting Lehman Brothers go under was because it feared creating a moral hazard if it had stepped in again, especially after its role in the Bear Stearns deal. 

impalaBut still, it’s hard to quantify the size of a moral hazard.  And there are times when the negative risks of the moral hazard outweigh the potential benefits of, say, a government bailout.  In the case of the auto industry, I’m not sure what would be best.  All I know is that I’ve been driving a rented car for the past ten months, and I’ve gotten it washed.  Twice.



Filed under Economy, Random